Home Buying in Arcadia>Question Details

cheryl porre…, Home Buyer in Los Angeles, CA

lookn to buy condo in sierra madre. I MUST transfer current property tax (Im 55yrs ) I understand that I must buy for less than I sell..need details!

Asked by cheryl porreca, Los Angeles, CA Thu Apr 22, 2010

I think that I can actually buy for 5% more than I sell my place for and still get taxed at the same rate...Is this correct? And is it possible to pay commission on the property I BUY out of escrow to lower the price of my new place even more?...ultimately, I'm thinking a condo in sierra madre is going to cost us in the neighborhood of $550, but our current condo will only sell for around $500...so it is a tight deal.

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http://assessor.lacounty.gov/extranet/guides/prop6090.aspx go on the web site to find the anwer to your question, and then when you are ready I would find a local realtor to keep you up to date on the Sierra madre inventors, and maybe for the benifit of the property tax, if you just can't find something in the right price, maybe you can consider morovia?
Annie Wong
Dilbeck Realtors
Annie.wong@dilbeck.com
0 votes Thank Flag Link Wed May 26, 2010
Hi Chergirl,
No disrespect but the agents from out of state are not aware of the tax issues you are asking about. Cailf. Propostions 60 and 90 address this issue. Prop 60 is for transfers within the same county and prop 90 is for transfers between the 7 counties that allow this property tax base transfer. You are generally correct that the purchase price can be 5% more as long as the new property closes at least 1 day after selling the old. You can google Calif props 60 and 90 for more general information, but I would consult a tax expert to answer your specific questions on costs.
Good luck,
0 votes Thank Flag Link Fri Apr 23, 2010
No.

Please talk to a CPA. You're all confused about taxes and asset protection.

For instance, you don't transfer property tax. The property tax applies to each individual property, and is based on the value of the property. I'm guessing you're concerned about capital gains, not property tax.

You don't necessarily have to buy for less than you sell. A CPA will explain that to you. Since that's the case, the 5% variance you mention makes no sense.

As far as property tax ("and still get taxed at the same rate"), property tax is based on two factors: The assessed value of the property and the tax rate. For example, let's say County A taxes at a rate of $1 per $1,000 assessed value. County B may tax at a rate of $1.20 per $1,000 of assessed value. So a home in County A valued at $500,000 would pay $5,000 in taxes. A home assessed for $500,000 in County B would pay $6,000 in taxes. So it's both the assessment AND the tax rate that matter.

If you buy a property, typically the seller pays the commission, not you the buyer. And even if you paid the commission, while it would lower your net, it would not lower the price you'd paid for the home.

Please, please, please talk to a CPA.. There are plenty of ways to accomplish what you're trying to do. But your "strategy" is just going to end up costing you a lot of money and not achieving what you want.

Hope that helps.
0 votes Thank Flag Link Fri Apr 23, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
I'm not sure what you want, but I'm certain that you should run the tax-related questions by a CPA.

The stuff you're talking about with escrow could be handled better by structuring the transactions another way.
0 votes Thank Flag Link Fri Apr 23, 2010
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