What are California Propositions 60 and 90?
California Propositions 60 and 90 are constitutional initiatives passed by California voters. They provide property tax relief by preventing reassessment when a senior citizen sells his/her existing residence and purchases or constructs a replacement residence worth the same or less than the original.
WERE THEY ENACTED?
Propositions 60 and 90 encourage a person, age 55 or older to “move down” to a smaller residence. When a senior citizen acquires a replacement property worth less than the original property, he/she will continue to pay approximately the same amount of annual property taxes as before.
THESE PROPOSITIONS WORK?
When the senior citizen purchases or constructs a new residence, it is not reassessed, if he/she qualifies. The Assessor transfers the factored base value of the original residence to the replacement residence. Proposition 60 originally required that the replacement and the original be located in the same county. Later, Proposition 90 enabled this to be modified by local ordinance. Los Angeles County enacted an ordinance to provide that when the replacement is located in Los Angeles County, the original property may be located in any other California county.
The seller of the original residence, or spouse who resides with the seller, must be at least 55 years of age at the time of the sale.
WHEN ARE THESE PROPOSITIONS EFFECTIVE?
The replacement residence must have been purchased or constructed on or after November 5, 1986 if the original was located in Los Angeles County. The replacement residence must have been purchased or constructed on or after November 9, 1988 if the original was located in any other California county. Claims must be filed within three years following the purchase of the replacement residence.
PROPOSITIONS 60 AND 90 LEGAL REFERENCE:
The seller of the original residence, or spouse who resides with the seller, must be at least 55 years of age at the time of the sale. Section 69.5 of the Revenue & Taxation Code.
PROPOSITIONS 60 AND 90 ELIGIBILITY REQUIREMENTS:
- The replacement property must be the owner’s principal residence and eligible for the Homeowners’ Exemption. The original property, at the time of its sale, must have been eligible for the Homeowners’ Exemption, or entitled to the Disabled Veterans’ Exemption.
- The seller of the original residence, or a spouse residing with the seller, must be at least 55 years of age, as of the date that the original property is transferred.
- The replacement property must be of equal or lesser “current market value” than the original.
- If the replacement is purchased in Los Angeles County, the original can be located in Los Angeles County or any other California county. Several other counties have passed similar Proposition 90 local option ordinances. If your original is in Los Angeles County, and you want to relocate in another county, contact that county for Proposition 90 eligibility.
- The replacement property must be purchased or newly constructed within two years (before or after) of the sale of the original property.
- The owner must file an application within three years following the purchase date or new construction completion date of the replacement property.
- This is a one-time only filing. Propositions 60 and 90 relief cannot be granted if the claimant, or spouse, was granted relief in the past.
- Propositions 60 and 90 relief includes, but is not limited to: single family residences, condominiums, units in planned unit developments, cooperative housing corporation units or lots, community apartment units, mobile homes subject to local real property tax, and owners’ living premises which are a portion of a larger structure.
- In most instances, if more than one owner of an original property is eligible for Propositions 60 and 90, they must choose among themselves which one will use the benefits.
As of November 20, 2014, the following ten counties in California have an ordinance enabling the intercounty base year value transfer:
- El Dorado
- Los Angeles
- San Bernardino
- San Diego
- San Mateo
- Santa Clara
NOTICE: This summary should not be relied upon in making a decision regarding the purchase or sale of a home. Please contact your C.P.A. and local Tax Assessor’s office to confirm the information in this summary. The information contained herein is believed accurate. It is intended to provide general answers to general questions and is not intended as a substitute for individual legal advice. Advice in specific situations may differ depending upon a wide variety of factors. Therefore, readers with specific legal questions should seek the advice of an attorney.