Understanding Propositions 60 and 90
Propositions 60 and 90, passed in 1986 and 1988 respectively, are forms of property tax relief for California homeowners who are 55 years of age or older. The propositions allow homeowners to transfer their property tax base year value from their current home to their replacement home. The propositions are beneficial for 55+ homeowners because the property tax base for the original property is guaranteed to be much less than today’s property tax base based on the current fair market value.
What is Proposition 60 and 90?
Proposition 60 allows the homebuyer to transfer their property tax base year value within the same county (intra-county) while Proposition 90 allows the homebuyer to transfer their property tax base year value from one county to another county (inter-county). The eleven counties that have enacted the ordinance to allow the property tax relief are Alameda, El Dorado, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolumne, and Ventura Counties. The ordinances for each county are subject to change at any time, and homeowners are encouraged to check each county assessor’s website for the most accurate information.
Prop 60 and 90 Eligibility Requirements
In order to qualify for Propositions 60 or 90, the homebuyer must meet specific requirements. The homebuyer or the residing spouse must be 55 years of age or older at the time the original property sells, and the property will be reappraised based on the current fair market values. The replacement property purchased needs to be of equal or lesser current market value than the original property sold. If the homeowner has a partial interest in the property, the entire market value of the home will be considered. Homeowners cannot combine the value of two or more properties to transfer their tax base to the replacement property that is more than one of the sold property’s value. Lastly, the replacement property must be purchased or built within two years of selling the original property, must be owner occupied, and qualify for homeowners’ exemption or disabled veterans’ exemption.
Propositions 60 and 90 allow the homebuyers to retroactively benefit, but the homebuyer must file the claim within 3 years of purchasing the replacement property or by the date of completion of the newly built replacement property. The completion date is considered as the date the local building department approves the home for occupancy or when the prime contractor has fulfilled all the contractual obligations. If there is no local building department or prime contractor, then the date of completion will be considered the day the home appears to be completed and usable. To receive retroactive benefits, the original property also must be eligible for homeowners’ exemption or disabled veterans’ exemption when sold or within two years of purchasing the replacement property or constructing a new one.
If the homeowner makes an improvement on the replacement property within two years of the purchase, then they can file for additional property tax relief as long as the current market value of the home is equal or less of the original property sold.
All types of homes qualify under Proposition 60 and 90. Propositions 60 and 90 are only allowed to be used once in a lifetime even upon divorce or death of a spouse. Homes transferred as a gift are not subject to Proposition 60 or 90. Partial property tax relief is not allowed. If one inherits a home from a parent and receives a parent-child exclusion, they will qualify for property tax relief upon selling the home. If a spouse becomes severely or permanently disabled, then they may qualify for Proposition 110, which would also allow them to transfer their property tax base. If there are two or more co-owners of a home and they are not married, only one of the co-owners may qualify for property tax relief under Proposition 60 and 90.
Reporting Prop 60 and 90
The tax relief is not automatic and will not be upheld unless it is filed with the county assessor. To file for tax relief under Propositions 60 and 90, the homeowner must file with the county assessor using form BOE-60-AH, Claim of Person(s) at Least 55 Years of Age for Transfer of Base Value to Replacement Dwelling. For more questions regarding Proposition 60 and 90, you can contact the Assessment Services Unit at (916) 274-3350 and visit the California State Board of Equalization. Click here for information on San Diego’s information on property tax relief for 55 plus, and Orange County for homeowners 55 plus.
Need More Information as a buyer in San Diego?
If you’re having thoughts of buying or selling in San Diego, please do not hesitate to contact Aumann Bender & Associates with any questions or to begin your househunting process. We look forward to hearing from you and welcome the opportunity to help you find the home that best suits the needs of you and your family.
Joy Bender is the co-founder/owner of Aumann Bender & Associates real estate group with Pacific Sotheby's International Realty. She has a passion for digital marketing, the serps, and helping clients discover San Diego. Follow her on Facebook for luxury lifestyle and more real estate tips.