proposition 60 Archives - Greenwald and Gerke Real Estate
Did you know that buying a home for retirement could potentially be beneficial for your tax filing? In the state of California, Propositions 60 & 90 were written to help aging adults with tax benefits when they move to a new residence.
Keep in mind that these tax benefits are only available one time for each household, and they apply to families moving to a new or existing home that is equal or lesser value than their current home. If a claim is filed, then it is possible to transfer the trended base value to your new property.
Qualifications for 60/90?
Proposition 60 and Proposition 90 offer similar benefits, but 60 is designed for moves within the same county and 90 is for inter-county moves. To qualify, your current home and new home need to be your principal residence and both need to meet the requirements for the Homeowner’s Exemption. Also, the counties involved must allow this tax benefit to transfer.
Also, the replacement property needs to be built or purchased within two years of the sale of the original property. Either you or your spouse needs to be over the age of 55 to qualify.
Eligibility is only available one time. Once you or your spouse has received this tax relief, then you will never be able to file for it again.
Types of Homes that Qualify
All types of replacement homes can qualify, including single family residences, community apartments, planned developments, condos, mobile homes, and a living unit within a larger structure. “Equal or lesser value” of the replacement property is defined by these guidelines:
- If the purchase or construction occurs before the sale of the original property, then the new property needs to be 100% or less than the value of the original property
- If the purchase or construction occurs within the first year, then it needs to be 105% or less compared to the value of the original property
- If the transaction happens in the second year, then it needs to be 110% or less compared to the value of the original property
Keep in mind that these guidelines are based on market value, not necessarily the purchase price or sale price. An assessor will determine the value of each property to ensure that these requirements are met.
Are you interested in learning more about how you can benefit from propositions 60 & 90? Call Greenwald &Gerke Realtors. We are here to help: (844) 782-9674