Seniors in California May Be Able To Transfer Property Tax Liability When Purchasing a New Home or Condo
Seniors age 55 and older under Assembly Bill 60 (AB60) are allowed to transfer their current home's property tax liability to their replacement property. This allows seniors to keep their current property tax assessed value when they sell their home in California and buy another home or condo of equal or lesser value. In California Proposition 13 keeps property taxes low as the assessed value of a home can only rise annually by no more than two percent or the rate of inflation, whichever is less. Seniors with big houses often times would like to sell and move to a smaller home. Because property taxes are based on assessed values at the time of purchase often times the newly purchased home or condo would normally result in a much higher tax being placed upon the senior. AB60 allows seniors to keep her current property tax liability.
Thus if a senior bought her home in California which is currently assessed at $50,000 (due to Proposition 13) and sells her home for $500,000 and purchases a new condo at $400,000, the senior can still pay taxes based on the old $50,000 assessment.
This provision can only be used once during a senior's life-time. The home must be in the same or reciprocal county and the senior must file the necessary application with their county's tax assessor. There are a few exceptions. Contact your CPA or tax attorney for advice on how to do so and AB60 if you plan to try and make use of this provision.
Thus if a senior bought her home in California which is currently assessed at $50,000 (due to Proposition 13) and sells her home for $500,000 and purchases a new condo at $400,000, the senior can still pay taxes based on the old $50,000 assessment.
This provision can only be used once during a senior's life-time. The home must be in the same or reciprocal county and the senior must file the necessary application with their county's tax assessor. There are a few exceptions. Contact your CPA or tax attorney for advice on how to do so and AB60 if you plan to try and make use of this provision.