Recently, we have been helping out with questions about California’s Propositions 60 and 90, so we wanted to take a moment to discuss them in more detail.
They are quite similar, so, understandably, there would be confusion. But after discussing the unique attributes of each one, we think you will be able to discern between the two.
We also wanted to provide you with an easy to follow checklist to see if you qualify for either Proposition.
What is Proposition 60?
Proposition 60 is a constitutional amendment that was approved by California voters back in 1986. It allows for the transfer of an existing Prop 13 base year value from a former residence to a replacement property within the same county, provided certain conditions are met. Homeowners who are 55 years and older and meet the qualifying conditions in the checklist below can benefit from Prop 60 in all counties.
What is Proposition 90?
Like Prop 60, Proposition 90 has the same qualifications and provisions. Still, the difference comes in that it applies to transfers from one county to another California county if the new county has enacted Prop 90. The enactment is optional, so there is no guarantee that Prop 90 will apply. As of November 2018, the following ten counties have an ordinance enabling the intercounty base year value transfer: Alameda, El Dorado, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, and Ventura.
For the most up-to-date information, contact the local assessor’s office to see if your original property can be transferred to a replacement in that county under Prop 90.
Now that we have an overview of each, here is a checklist that you can use to determine your eligibility.
To qualify for Prop 60, is your original property (your former residence) and the replacement residence (the new property) located in the same county? If yes, you are covered.
To qualify for Prop 90 (where you are moving to a new county), has the new county adopted Prop 90? If yes, you are covered. Remember to check with the new county to be sure.
The remaining items on the checklist apply to both Prop 60 and Prop 90:
Are you (the seller) or a spouse living with the seller at least 55 years old as of the date of the transfer of the original property? If yes, you are covered.
Is your original property eligible for the Homeowner’s Exemption (i.e., was your primary residence) or entitled to the Disabled Veterans’ Exemption? If yes, you are covered.
Is the value of your replacement dwelling of equal or lesser value than the original property? If so, you are covered.
Are you within the two-year timeline that your replacement dwelling is purchased or newly constructed after the sale of your original property? If yes, then you are covered.
Will you sell your former residence? If yes, then you are covered. Keep in mind that your original property must be reappraised at the current fair market value as a result of the transfer, and it cannot be gifted to children or anyone else.
Please keep in mind that this checklist is not exhaustive, and it’s best to work with your accountant or tax attorney to determine your eligibility. You should also check with each county to determine their claim requirements if you are planning to employ Props 60 or 90. These are one-time benefits, so you will not be eligible if you have previously received this benefit. GLEN OAKS ESCROW