A client of mine recently sold his beautiful home in Noe Valley. In the next year or so he would like to purchase another property. Since he just turned 55 this year, he is fortunate to have the opportunity to buy a property of lesser value within the next two years and transfer the original tax assessment of the property he just sold to his new residence; this will result in him paying less in real property taxes. Proposition 60 allows homeowners 55 or older to sell a primary residence and purchase another for equal or lesser value while keeping the original tax assessment of the original property. This opportunity can only be used once. The new residence must be in the same county as the original residence. (There was a later proposition passed – Proposition 90 – which allows some counties to grant reciprocity. For example, Alameda County allows reciprocity but San Francisco County does not. Someone may sell in San Francisco and buy in Alameda and take advantage of the transfer of the original tax assessment but one cannot sell in Alameda and buy in San Francisco and take advantage of the transfer.)
The new residence cannot exceed the value of the old residence if a replacement property is purchased before an original property is sold. However, if the new residence is bought within one year later, it can exceed the value of the old residence by 5% and if bought within two years later it can exceed the value of the old residence by 10%. A claim for relief must be filed within 3 years of the date a replacement property is purchased. This and more information about Proposition 60 is explained on the back of the claim form that needs to be filed with the Assessor-Recorder’s Office.
While this is a great opportunity for those 55 and older, make sure you check with a real estate and tax attorney to confirm that you are filling out all of the necessary forms and that you are complying with the statute to get this great benefit.