Thursday, February 28, 2008

Save On Your California Property Taxes Using Proposition 60 & 90

If you sell your home in California's Orange County and buy a replacement home in the OC (or other reciprocal county), you can maintain your current property tax rate for this replacement home. That's a possible big property tax savings year after year, according to California Proposition 60 passed by voters in 1986.
Check with the Orange County Assesssor. There are conditions and restrictions to qualify: You must be 55 years or older. This only applies to the sale of your principal home. Vacation homes or rental property do not apply. The replacement home you buy must be at the same or lower value of the home your selling. However, the replacement home can be as high as 5% more if purchase within one year after sale of prior home. Proposition 13 passed in 1978 in California, setting property taxes to a rate of one percent of assessed value, also determined by purchase price.
If you qualify for Proposition 60, your property taxes would remain at what they were when you bought your prior home. Proposition 90 was adopted in 1988 and extends Proposition 60 benefits to a homeowner who sells and buys in two different California counties, only if the other county outside of Orange County has adopted this county ordinance permitting this transfer to occur. There are 7 ‘reciprocal’ counties that have adopted the Prop 90 ordinance making Prop 60 benefits available to local replacement dwellings. These counties are Alameda, Los Angeles, Orange, San Diego, San Mateo, Santa Clara, and Ventura
This is complicated. We recommend you contact us at Explore Group or your real estate lawyer or certified public accountant to determine whether you qualify.

Posted by Harrison K. Long, Explore Properties Group, Feb. 28, 2008

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