Prop 60 and Prop 90 Tax Transfer

Prop 60 and Prop 90 allow home sellers to transfer their old tax base (property taxes) to a new home they purchase (resale or new construction). 

Many rules and restrictions apply. 

It starts with being 55 years of age or older at the time the downleg property is sold and closes escrow. We have extensive experience helping homeowners with Prop 60 and Prop 90 transfers.

The rules are here below but feel free to call us so we can discuss your individual situation. Some advanced planning is very important. We would be remiss if we did not recommend that you always include your estate and trust attorney and your CPA to be involved in this planning. 

Contact us for the right folks to be able to help you specifically with those needs if you have not begun estate planning already. We can help find the right person for your needs whether you are in your 30's, 40's, 60's, or 80's. 

In regards to your estate planning: Whether you own your own home or a myriad of real estate investments, you must always plan ahead when it comes to the disposition of that wealth down the road. Life insurance, a will, an executor, trusts, and even how to hold title for the best tax benefits must be taken care of. 

A little advanced planning can make a big difference. Call us to get in touch with the right professionals. The information contained on this site in regards to tax and estate planning is not complete and should not be construed as tax or legal advice. You should always consult the appropriate licensed professional CPA or Attorney for a complete analysis of your needs.

Proposition 60

Proposition 60 allows homeowners 55 years of age and older to transfer the base year value of their principal residence to a newly purchased residence in the same county, providing that certain requirements are met.

The requirements, in part, for this exclusion include the following:

The replacement residence must be purchased or newly constructed within two years (before or after) of the sale of the original residence. The purchase or new construction of the replacement dwelling must include the purchase of that portion of land on which the replacement dwelling will be situated.

The principle claimant or the claimant's spouse who resides with the claimant must be at least 55 years of age at the time the original residence was sold. The claimant must be an owner of record of both the original and replacement residences.

The sale of the original residence must qualify for reassessment under the provisions of California Revenue and Taxation Code Section 110.1. 

The principle claimant must have been either:

1. Receiving, or eligible for, a Homeowner's Exemption, or

2. Receiving a Disabled Veteran's Exemption on the original and replacement residences. 

The replacement residence must be equal to or lesser in value than the original residence. "Equal to or lesser in value" has been defined as: 100 percent of the market value of the original property as of its date of sale if the replacement dwelling is purchased before the original property is sold; 105 percent of the market value of the original property as of its date of sale if the replacement dwelling is purchased within one year after the original property is sold; or 110 percent of the market value of the original property as of its date of sale if the replacement dwelling is purchased between one and two years after the original property is sold. 

Special rules apply to multi-unit dwellings and mobile homes. 

Relief pursuant to Section 69.5 (Proposition 60 and 90) of the Revenue and Taxation Code can be granted only once, except for certain circumstances regarding severely and permanently disabled persons as defined in Revenue and Taxation Code Section 74.3. 

Claims must be filed within three years of the date the replacement residence is purchased or newly constructed. You must complete the claim form and provide evidence and/or declare under penalty of perjury that you are at least 55 years of age. Application forms may be obtained by contacting the Real Property Division of the Santa Clara County Assessor's Office at the number below.

Proposition 90

Proposition 90 allows a homeowner to transfer the base year value of their principal residence in one county to a newly purchased residence in another county providing that certain requirements are met. Only a limited number of counties are participating in Proposition 90.

Proposition 90 Requirements for Santa Clara County: 

The requirements for Proposition 90 in Santa Clara County are the same as for Proposition 60 except for the following: 

1. Effective date: November 9, 1988. 

2. A non-refundable processing fee of $110 is required. 

The effective dates and filing fees vary from county to county. Those property owners interested in transferring the base year value from their principal residence located in Santa Clara County to a newly purchased residence in another county should call that county to make sure that the other county is participating in Proposition 90. 

Applications must be filed in the county where the newly purchased residence is located. 

The following is a list of those counties which have approved Proposition 90 and will currently accept base year value transfers from other counties.

Inter county participants (*Subject to Change-Check directly with each County)

As of June 5, 2015, the following eleven counties in California have an ordinance enabling the intercounty base year value transfer:

Alameda

Orange

San Diego

Tuolumne

El Dorado *

Riverside

San Mateo

Ventura

Los Angeles

San Bernardino

Santa Clara

Since the counties indicated above are subject to change, we recommend contacting the county to which you wish to move to verify eligibility.

* On August 30, 2016, the El Dorado County Board of Supervisors approved an extension of their ordinance, which will now sunset on October 1, 2021.

Proposition 58

Parent-Child Transfers (R&T Section 63.1)

The Basics -

Real estate that is transferred from parent(s) to child(ren), or from child(ren) to parent(s) may be excluded from reassessment. 

The established Prop. 13 taxable value is not affected by the transfer 

Exclusion is not automatic; there must be a timely filed claim with the Assessor's Office 

The new owner's taxes are calculated on the established Prop.13 factored value, instead of the current market value when the property is acquired. 

$1 million limit (taxable value) on transfers of non-principal residence property 

No dollar limitation on the original owner's principal residence 

Transfers between legal entities (i.e., corporations, partnerships) that are owned by parents or children do not qualify

The parent-child transfers under Proposition 58 include all types of transfers of title from parents to children or from children to parents. Transfers must occur on or after November 6, 1986, the effective date of the Proposition. They may be in the form of a deed (recorded after November 6, 1986), an inheritance from someone who was deceased after November 6, 1986, a court order dated on or after that date, etc.

Further, this Proposition includes all types of real property owned by the transferor, including all the value of his/her principal place of residence and on the first one million dollars ($1 million) of the enrolled value of all other types of property. A mother and father can combine their exclusion for a limit of $2 million dollars.

For More Information Please Contact: 

Assessor Real Property - General Questions, Property valuations and Propositions 3, 8, 60, 90

70 West Hedding St., East Wing

5th Floor

San Jose, CA 95110

Phone: 408-299-5300

Fax: 408-298-9439

Email: RP@asr.co.scl.ca.us