Marin – June 2019 Real Estate Update

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Adam’s Marin Market Update

San Francisco – May 2019 Real Estate Update

Transferring Your Property Tax Base After Age 55

Downsizing with Prop 60/90

Transferring your property tax base after age 55 – how does it work?

You want to move, but you also want to keep your property taxes low.  Fortunately there’s a solution if you or your spouse are over age 55.  Proposition 60/90 allows homeowners 55 or older to transfer their properties tax base to a principal residence of an equal or lesser value within the same County or to a few other California counties that reciprocate.  The replacement residence must be purchased within two years of the sale of your existing home.  You can buy first, and have up to two years to sell your existing property, OR you can sell first and have up to two years to buy a replacement property.

If you live in San Francisco or Marin, you can buy a property in your current County or in Alameda, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne, or Ventura (counties may change eligibilities so check with each counties assessors office).  It’s pretty simple if you fit into the typical scenario, but there are always individual cases, so we’ve provided more details and links below.  But first, let’s look at how it typically works.

THE 4 STEPS:

1 – We can guide you, but we’ll also provide you with all the resources you need.  We’ll email all the necessary links, from the California State Board of Equalization, to the various County Assessors Offices, to the required forms.  Bottom line, before making a move, make a plan. 

2 – Sell your existing principal residence.  This is the best way to know for sure how much you can purchase a replacement property for. 

3 – Purchase a new principle residence of equal or lesser value within 2 years.  The definition of “equal of lesser value” allows you to purchase a replacement property for up to 105% of the value in the year following the sale, or up to 110% or the value within the second year following the sale. (for example, if you sell your existing principle residence for $1,000,000 you can purchase a property for up to $1,100,000 1-2 years after the sale date).  Since most people in San Francisco or Marin are selling to downsize the extra 5% or 10% usually isn’t a factor.

4 – Within 3 years of purchasing the replacement property file Board of Equalization form BOE-60-AH with the county that your replacement property was purchased.  Most people file the form much sooner than the 3 year limit so they can get the property tax rate adjusted ASAP.  If you file within the 3 years, a retroactive adjustment will be made and you will be refunded any previous overpayment of taxes.  You can file after the 3 year deadline, but then relief will only be granted beginning with the calendar year the claim was filed.

That’s it in a nutshell.  The alternative strategy is to buy first and then sell your existing residence.  That’s also common, but it’s important to make sure the property you’re purchasing is of lower value than what your existing home will sell for, otherwise you won’t be able to qualify for the tax relief. 

Below are additional links including FAQ’s at the State Board of Equalization Website, the San Francisco Assessors office and the Marin Assessors office.  Feel free to email us directly and we’re happy to provide additional information (adam@adamwattsrealty.com).

About Zumra and Adam:  

Adam and Zumra bring over 30 years of sales, marketing, and management experience, along with 20 years of local Bay Area real estate expertise. They are top producers and well respected in the industry by both agents and clients alike. 

Resources and links:

Board of Equalization Prop 60/90 Info

https://www.boe.ca.gov/proptaxes/prop60-90_55over.htm#Description

Board of Equalization Prop 60/90 FAQs

https://www.boe.ca.gov/proptaxes/prop60-90_55over.htm#FAQs

San Francisco Assessor Prop 60/90 Info

https://www.sfassessor.org/tax-savings/tax-relief/transfer-assessment-replacement-property-senior-citizens

Marin Assessor Prop 60/90 Info

https://www.marincounty.org/depts/ar/divisions/assessor/exclusions/homeowners-55-or-older

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