Tax Breaks for Senoirs RelocatingAs strange as it may seem, homeowners who sell one home and buy another one of equal or lesser value can sometimes suffer a large increase in their property tax. It’s helpful to understand how this seemingly strange result can occur, and it’s important to understand how to avoid it when possible. In California, two laws, Propositions 60 and 90, shield senior citizens from such a tax increase in many cases. Seniors who are aware of the problem and the legal solution can protect themselves by acting promptly when changing residences. We’ll briefly explain the matter here. When the time comes, you can ask your realtor or tax advisor for help with the details.

How can moving to a home even of lesser value sometimes cause an increased tax?

Ordinarily, when someone buys a new home, its value at the time of purchase becomes the basis for the property tax on it. Seniors who bought their home long ago may still be accustomed to figuring their property tax based on a value established long ago. However, property values have generally increased over the decades. So after a sale and a new purchase, a homeowner’s property tax may be greater, even if the new home’s value is less than or equal to the former home’s value today.

In retirement, seniors may have less income out of which to pay their property tax, and a large tax increase may make matters even more difficult. Thankfully, California voters approved Propositions 60 and 90, which protect senior citizens in many cases. We’ll explain when and how the laws can help.

How do Propositions 60 and 90 help seniors to limit their property tax?

When seniors sell their home and buy another one, in certain circumstances, Propositions 60 and 90 allow them to continue to use their former home’s longstanding appraised value in figuring the property tax on their new home. Here are the key points. (1) To benefit, a homeowner or spouse must be 55 years of age or older when selling the original home. (2) The new home must have a value less than or equal to the former home’s value when sold. (3) In most cases, homeowners can benefit only once, that is, in the course of only one change of residence. (4) The requirements include timeframes for the sale and purchase and for filing a claim, after which homeowners can no longer claim the benefit. (5) Proposition 60 covers seniors moving within a county, and it’s applicable in all California counties. (6) Proposition 90 covers seniors moving between California counties, and each county may decide whether to grant the benefit to seniors moving into the county. It’s important for clients of the Lund Team moving into San Diego County to know that the county has granted the benefit. If you’re a senior citizen or soon will be, and you’re anywhere in the process of buying a new home and selling an old one, consult your realtor or tax advisor for help in determining your eligibility for the tax benefit and in claiming it.

The California State Board of Equalization offers seniors and their advisors more information on Propositions 60 and 90 in the form of answers to thirty-two frequently asked questions.

The Lund Team would be happy to assist you with any questions you might have about taking advantage of either Proposition. For more information, call us at (760) 438-0800.

Posted by Lund Team Marketing on


Email Send a link to post via Email

Leave A Comment

Please note that your email address is kept private upon posting.