California's Property Tax Relief

May 8, 2008

Since I had a question yesterday concerning property tax laws, I thought I would post a quick summary; not of all the property tax laws, but of the law enacted in 1986 that allowed a transfer of a homeowner's Proposition 13 tax basis.

This "tax relief" is available for homeowners over 55 years of age if certain conditions apply. This "tax relief" became California law when the voters passed Proposition 60 in 1986.

The property must be a principal residence (where you are living).

You or your spouse must be over the age of 55 when the home is sold.

The replacement home that you purchase must be of equal value or less than the home you are selling.

The replacement home must be within the same county as the home you are selling. (Proposition 90 was passed by the voters in 1988 and allowed each county to decide whether they would accept property tax transfers from homeowners selling outside the county where the replacement home was purchased.)

This transfer of your Proposition 13 tax assessment may only be done once in a lifetime. If one spouse has used Proposition 60, both spouses are regarded as having used up their eligibility.

Without exception, the replacement dwelling must be purchased or newly constructed within two years (before or after) of the sale of the homeowner's property.

To receive the full Proposition 60 benefit, a claim must be filed within three years of the date a replacement dwelling is purchased or new construction of a replacement dwelling is completed.

For more information, you might consider entering "Proposition 60" into a search site.