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Seniors, learn how to transfer your low property taxes when downsizing

Seniors, learn how to transfer your low property taxes when downsizing

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Dear Phyllis,

My husband and I are planning on downsizing. But we are undecided if we should rent our present home and then perhaps rent something in San Diego where we think we want to live. And then when we finalize our destination, we could purchase. Or maybe we should sell our home while home values are still strong. I have a couple of concerns; the first is how do I go about transferring or keeping my current property taxes? I understand the minimum age is 55, but my husband is fifteen older than me, can we still take advantage of this transfer even though I am not 55?

Sandy

Dear Sandy,

Questions regarding seniors transferring their tax base are quite common. There are two propositions which address how seniors can retain their low property taxes:

Proposition 60 allows seniors (age 55+) to transfer the tax base from their current home to a less expensive replacement home within the same county. Only one of you needs to have reached the age of 55 prior to the sale of your principal residence. At present, this is a onetime tax reprieve which requires the purchase of the less expensive residence within two years from the sale of the original property. Both homes must be the principal residence.

Proposition 90 relates to transfers of base value from one participating California county to another. Participating counties include your desired relocation to San Diego and: Alameda, Orange, San Mateo, Ventura, Los Angeles, Santa Clara and El Dorado.

The idea of renting first is certainly a cautious approach. If you do sell your existing residence in order to qualify for the transfer of your property tax basis you must close escrow on a lesser priced property within two years from the sale of your current residence.

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Wendy

My husband and I plan on using this helpful tax break. We are holding for now because I don’t want to move too soon and use up my one time transfer in case another move is needed. So here we sit and wait