Were you aware that provisions exist to reduce property taxes on the sale of a principal residence for those over 55? Homeowners who sell and meet certain criteria can transfer the property tax assessment of their existing residence to a replacement residence within 24 months before or after the sale, in:
(1) The same county (Proposition 60), or;
(2) Another county if that county has adopted an ordinance authorizing this (Proposition 90).
In order to effect this transfer these Propositions establish a maximum purchase price for the replacement property based on when it is acquired. The acquisition date of the new home, and maximum purchase price allowed for the new property to receive this benefit, are as follows;
a) New Home Purchased
b) Maximum Purchase Price Allowed
1a) Before the sale of the old residence
1b) 100% of sales price of old residence.
2a) 0-12 months
2b) 105% of sales price of old residence.
3a) 12-24 months
3b) 110% of sales price of old residence.
For those over 55 who want to downsize, or make a lateral move but are afraid of the property tax consequences after years of appreciation, this can represent tremendous tax savings year after year. Contact your tax advisor for further information.
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