Home Buying in 95125>Question Details

Wg Resident, Home Buyer in 95125

If I sell my home in Santa Clara County and purchase another that costs less, can I keep my tax rate?

Asked by Wg Resident, 95125 Sun Nov 13, 2011

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Steve Ornellas’ answer
Wg Resident:

As you will read on page 2 of the document at the end of this post (generated by the CA State Board of Equalization and sent to all County Assessors in 2006):

“The replacement dwelling must be of equal or lesser value as compared to the original property”.

You may just be mulling over a move at the present time; however, as you become more serious about moving I would highly advise consulting a tax/financial/estate planner before making your final decision!


There are actually THREE CA Propositions that allow transfer of tax base. In fact, there are special circumstances that not only allow some to transfer tax base TWICE, the replacement property may be 110% of the sale price (see page 2 of the linked document below).

PROP 60 provides for the transfer of a base year value from a principal residence to a replacement dwelling within the SAME County by a homeowner age 55 and over.

PROP 90 authorizes County boards of supervisors to adopt ordinances allowing base year value transfers between DIFFERENT counties. As of 2/15/10 (confirm current status before taking any action) only the following eight counties in California have an ordinance enabling intercounty base year value transfers:

Alameda, Los Angeles, San Diego, Santa Clara, El Dorado, Orange, San Mateo, Ventura

Now, generally, a person can use Prop 60 or 90 only once. However, PROP 110 provides the sole exception where a person first received relief for age and then subsequently the claimant or claimant's spouse became severely and permanently disabled and has to move because of the disability.

Prop 110's Section 74.3(b) extends Prop 60 & 90 to "... any person who has a physical disability or impairment, whether from birth or by reason of accident or disease, that results in a functional limitation as to employment or substantially limits one or more major life activities of that person, and that has been diagnosed as permanently affecting the person's ability to function, including, but not limited to, any disability or impairment that affects sight, speech, hearing, or the use of any limbs."


In addition, you can purchase up to 110% of the of the full cash value of the original property; BUT, there are timeline hurdles, as follows:

1) 100% of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed prior to the date of sale of the original property,

2) 105% of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed within the first year following the date of the sale of the original property, or

3) 110% of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed within the second year following the date of the sale of the original property.


You can read much more about the three propositions here: http://docs.Steven-Anthony.com/Prop60-90-110.pdf

-Steve
1 vote Thank Flag Link Mon Nov 14, 2011
BEST ANSWER
I was just talking about this earlier today!
If you are over 55yrs old, the answer is yes, you can have a one-time transfer of your tax basis.
Check the County Tax Assessor's web page to get e details.
Cheers,
Linda Baker
Alain Pinel Realtors
408.712.3431
LBaker@apr.com
0 votes Thank Flag Link Sun Nov 13, 2011
Here's the link for Proposition 60 for Santa Clara County. It's a long one but it works:
http://www.sccgov.org/portal/site/asr/agencyarticle?path=%25…

Proposition 90 will allow you County choices other than Santa Clara County:
http://www.sccgov.org/portal/site/asr/agencyarticle?path=%25…
1 vote Thank Flag Link Sun Nov 13, 2011
Hi Wg,

You have been given some great answers and links below. Prop 60, 90 and 110 should help you come up with your answer before you consult you tax advisor. If you are 55 and staying within the county it would be yes. You do want to check if you are moving out if the county if that county cooperates with Santa Clara County.

Please call If you need help with your home search.

Happy Holidays,

Lillie Missbrenner, Realtor
Short Sale Specialist, HAFA and REO certified
Better Homes and Garden Previosly Prudential California Realty
Cell: 925-628-9100
0 votes Thank Flag Link Mon Nov 28, 2011
Hi Wg,
The answers to all your questions are here at the Board of Equalization website:
http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm

Read it carefully. You will get answers to many scenarios you might not have thought of.
0 votes Thank Flag Link Wed Nov 23, 2011
Hi Wg Resident

Yes you should be able to iff, you are over 55 years old and have not done it before.

Also it is very important that you are in the same county or a select few, allowed in the State.

Go to the site referenced below:

http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm

If there are any questions do call.
Best regards.
Perry

408-656-5343
0 votes Thank Flag Link Tue Nov 15, 2011
This is not tax advice. I had a client last year who lived in her Santa Clara County Home for over 35 years. She had significant equity appreciation and when she sold she downsized to a condo in Santa Clara County. She was over 55 years old and was able to transfer her former residence property tax to the condo. It is important to understand the guidelines by reading Props 90 and 60. Additionally, there may be some capital gains depending on the equity so that is why it is important to consult a trusted tax adviser to determine what other options you may have and any tax consequences.

All the best to you.
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Mon Nov 14, 2011
Dear Wg Resident:

It is best for you to consult with a professional tax advisor for a thorough understanding of the implications of transaferring your tax base from one home to another. There can be many variables.

Sally Blaze,
Realtor
Alain Pinel Realtors
925-998-1284
0 votes Thank Flag Link Sun Nov 13, 2011
It all depends which city and county you purchase in. Not every area will allow for the lower tax revenue. It is not as simple as just moving to a home with a lower value. It will take some investigation on your part to see if the new area is cooperating.

Jim Mauldwin
Intero Real Estate
408-863-3020
0 votes Thank Flag Link Sun Nov 13, 2011
Not being a Tax Guy,
I'm not sure of it:
If you have been under Prop 13, and you sell the house, you lose that Prop 13 rate forever.
You should check your Assessment Schedule; I believe it will specify Prop 13 if you were benefiting.

At this point, you prpbably have to be pretty old to remember Prop 13.

Good luck and may God bless
0 votes Thank Flag Link Sun Nov 13, 2011
Hello Wg~

Thank you for your post. Answer, Yes you can. The reason is because the current home tax base is determined based on a lower (original) purchase price, not the current sales price. The new home will cost less than the sales price of the current home, but more than the purchase price of the original home. As Linda pointed out if you are over 55 years of age one time transfer. See link below:

http://www.silvar.org/index.cfm/prop_60_90.htm/

Best Regards~

Happy Thanksgiving
Denise A. Szyszlo Realtor
DRE 01441160
Office:: (408) 369-2000 x319
Mobile: (408) 768-7097
Fax: (888) 334-0888
Email: denise.szyszlo@century21.com
Website: http://www.DazzleHomes.com
CENTURY 21-Alpha
419 E. Hamilton Ave, Campbell, CA 95008
0 votes Thank Flag Link Sun Nov 13, 2011
If the home you are going to buy costs less than the home you are going to sell when yhou bought it, plus other step ups in basis from remodeling, then you don't need proposition 90. Otherwise the link to proposition 90 given to you by previous answers is going to be your best source of general information for you.
Mitchell Pearce
408-639-0211
0 votes Thank Flag Link Sun Nov 13, 2011
Hi Wg Resident! I have attached a link for you to review that relates to your question to some degree..

Since Realtors are not licensed to give tax advice I won't offer any more than to encourage you to gain guidance from a tax professional.

My first thought was If you buy a home with a lower tax base it would make sense to let your other tax base go. You must have a tax implication that benefits you ... see a tax person! :)

If I can be of any further assistance you are welcome to contact me.

Michael
http://LosGatosHomesandRealEstateBlog.com
0 votes Thank Flag Link Sun Nov 13, 2011
You must stay in Santa Clara county as well.
0 votes Thank Flag Link Sun Nov 13, 2011
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