Here is my latest column as published in the Homes section of San Jose Mercury News papers!
Ability to transfer assessed property values delivers big benefit for buyers 55 and over
Last weekend I collaborated with JK and Scott Watson, a terrific mom-and-pop real estate team from Fremont. The Watsons are representing a husband and wife in their 60s who have owned their current home for more than 50 years and pay only $1,000 in annual property taxes. Because they are also caring for much older parents, the clients want to move to a newer, single-story home. Trouble is, downsizing locally will be difficult without sacrificing home size or location, not to mention the clients' initial worry over taxes.
As a broker and Realtor® east of Sacramento in El Dorado Hills, I love working with people like the Watsons’ clients, who get to improve their lifestyle by taking advantage of some California tax laws. Through Proposition 60 and Proposition 90, many homeowners can transfer the benefits of Prop 13’s locked-in assessed property values (and correspondingly lower taxes) when replacing their primary residence.
Under Prop. 60, for starters, homeowners 55+ or permanently disabled who sell their primary residence can transfer its assessed value to a home of equal or lesser value in the same county. Think of it as a hard-earned gift for the 55+ crowd, who can avoid the tax hit of downsizing to a less expensive home that would otherwise be subject to the current-year’s assessed taxes.
As the Watsons’ clients are realizing, however, it’s not easy to find a suitable replacement home in the Bay Area. Enter Prop 90, which allows homeowners to transfer their assessed value to a replacement home of equal or lesser value in one of 11 California counties that accept incoming “intercounty base year value transfers.” In those counties – Alameda, El Dorado, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolomne and Ventura – eligible buyers can purchase a replacement property of equal or lesser value and transfer the assessed valuation of the primary home they sold in another county.
Prop 90 creates remarkable opportunities for people 55+, many of whom are approaching major life changes. For some, downsizing means finding a more comfortable home and saving for the unknown. For others, it may mean purchasing greater luxury for less money or buying a smaller primary residence while investing in a vacation home.
As an El Dorado County Realtor®, I love meeting brokers and agents like JK and Scott, whose Bay Area clients can put their home equity toward genuine luxury and long-term financial security. Sacramento bedroom communities such as El Dorado Hills and Cameron Park offer top-quality new construction plus access to cultural amenities, healthcare and great schools, all of which contribute to long-term value. Even better? El Dorado County accepts buyers’ Prop 90 intercounty base-year transfers.
A final note: In most situations, the replacement-home benefit can be used only once. Before claiming the Prop. 60 or Prop. 90 benefit, make sure your replacement home is going to be your “it” home – your last planned primary home. Your Realtor®, your local real estate board or your assessor’s office can provide more information.