Senior Citizen’s Replacement Dwelling Benefit
Who Qualifies?
If you or your spouse that resides with you is age 55 or older, you may buy or construct a new home of equal or lesser value than your existing home and transfer the trended base value to your new property.
This is a one-time only benefit. Our Beverly Hills Real Estate Agents say that you must buy or complete construction of your replacement home within two years of the sale of the original property. Additionally, our Beverly Hills Real Estate Agents say both the original home and the new home must be your principal place of residence.
A claim must be filed within three years of purchasing or completing new construction of the replacement property. If a claim is filed after the three-year period, relief will be granted beginning with the calendar year in which the claim was filed. Once you have filed and received this tax relief, our Beverly Hills Realtors say neither you nor your spouse who resides with you can ever file again.
Eligibility Requirements:
Our Beverly Hills Realtors say that the replacement property must be your principal residence and must be eligible for the Homeowner’s Exemption or Disabled Veterans’ Exemption.
In addition, our Beverly Hills Real Estate Agents often will tell you that the replacement property must be of equal or lesser “current market value” than the original property. The “equal or lesser” test is applied to the entire replacement residence, even if the owner of the original property acquires only a partial interest in the replacement residence. Owners of two qualifying original residences may not combine the values of those properties in order to qualify for a Proposition 60 base-year transfer to a replacement residence of greater value than the more valuable of the two original residences.
Furthermore, our Beverly Hills Real Estate Agents say that the replacement property must be purchased or built within two years (before or after) of the sale of the original property.
Your original property must have been eligible for the Homeowner’s or Disabled Veterans’ Exemption.
You, or a spouse residing with you, must have been at least 55 years of age when the original property was sold.
Frequently Asked Questions
Q. What is the difference between Proposition 60 and Proposition 90?
A. Proposition 60 relates to transfers within the same county (intra-county). Proposition 90 relates to transfers of base value from one county to another county in California (inter-county).
Q. If I qualify for Proposition 60/90 benefits, do I still need to file a Homeowners’ Exemption on the replacement property?
A. Yes. Most Beverly Hills Real Estate Agents will tell you, Homeowners’ Exemptions are not granted automatically.
Q. What is the Proposition 60/90 filing deadline?
A. Our Beverly Hills Realtors say that a claim must be filed within three years of purchasing or completing new construction of the replacement property. If a claim is filed after the three-year period, our Beverly Hills Realtors say relief will be granted beginning with the calendar year in which the claim was filed.
Q. My original home is located outside Los Angeles County, but my replacement home is in Los Angeles County. Do I qualify for relief?
A. Yes.
Q. I plan to relocate from Los Angeles County to another county. Do I qualify for relief?
A. Yes. You may qualify for relief.
Q. Do all replacement homes qualify?
A. If you meet all other eligibility requirements, our Beverly Hills Buyer’s Agents say relief is granted for a single family residence, condominium, unit in planned development, cooperative housing, community apartment, mobile home subject to local real property tax, and living unit within a larger structure consisting of both residential and non-residential accommodations.
Q. If I make an improvement to my replacement home within two years of purchase, can I get additional tax relief for the new construction?
A. Yes, our Beverly Hills Realtors say that as long as the total amount of your purchase and the new construction does not exceed the market value of the original property at the time of the sale.
Q. What does “equal or lesser value” of a replacement property mean?
A. The meaning of “equal or lesser value” depends on when you purchase the replacement property. In general, equal or lesser value means:
100% or less of the market value of the original property if a replacement property was purchased or newly constructed before the sale of the original property, or
105% or less of the market value of the original property if a replacement property was purchased or newly constructed within the first year after the sale of the original property, or
110% or less of the market value of the original property if a replacement property was purchased or newly constructed within the second year after the sale of the original property.
When making the “equal or lesser value” test, it is important to understand that the market value of a property is not necessarily the same as the sale or purchase price. The Assessor will determine the market value of each property. In some new developments, the indicated sale price does not include upgrades paid for outside of escrow. The Assessor must consider the value of these upgrades when determining the market value of the property.
If the market value of your replacement dwelling exceeds the “equal or lesser value” test, no relief is available. It is “all or nothing” with no partial benefits granted.
Q. Can I give my original home to my son or daughter and still get Proposition 60/90 benefits when I purchase a replacement property?
A. No. A handful of Beverly Hills Realtors will tell you that an original property must be sold and subject to reappraisal at full market value.
Q. If an original property has multiple owners, can Proposition 60/90 tax relief be split?
A. No. The co-owners must determine between themselves which one will get the benefit. Only one.
For comments, questions, or information, call Ron Wynn at (310) 963-9944 or email: Ron@RonWynn.com
For you convenience, visit the following websites to find information specific to your city/county:
Alameda - www.acgov.org/assesor
El Dorado – www.edcgov.us/assessor
Los Angeles – www.assessor.lacounty.gov
Orange County – www.ocgov.com/assessor
Riverside – www.riversideacr.com
San Bernardino – www.sbcounty.gov/assessor
San Diego – www.arcc.sdcounty.ca.gov
San Mateo – www.smcare.org
Santa Clara – www.sccgov.org
Tuolumne – www.tuolumnecounty.ca.gov
Ventura – www.assessor.countyofventura.org