Thursday, November 10, 2005

A reminder about Proposition 60 and 90

We are having a lot of calls about Propositions 60 and 90. It's time for a little refresher course here.

First of all, Propositions 60 and 90 apply only to the state of California, and only to the sale of a personal residence, and only if you are age 55 or older, and only if your new residence costs less than the one you are selling (with some adjustments to this "buy down" rule). Plus, you can only use Prop 60 ONCE in your lifetime.

Remember, what we are mentioning here are only the highlights of the Propositions, and by no means is this information the law. You MUST verify your own situation with your accountant, tax advisor, financial advisor, etc. ... you get the picture!

What Proposition 60 does is allow you to keep your "factored" property tax base of your current residence, instead of using the higher tax base of your replacement residence. (Again, there are definitions in the actual Proposition of what your "factored property tax base" consists of, etc.) Proposition 60 applies if you sell your personal residence and move within the same county (regardless of what California county it is).

Proposition 90 comes into play if you want to sell your residence and move to a NEW county. Currently there are only 7 counties that allow you to move into the county and bring your tax base with you from another county.

Quite simply, if you are thinking of using Propositions 60 and 90, you MUST verify all your information before taking such a step. It would be terrible to sell your home and buy another, then only to find out that you didn't qualify to use the propositions, or for some other reason were not able to use them.

There is a lot of good information on the L.A. County Assessor website here. You should also check with the County Assessor for the county you currently live in, and for the county you are moving to (if it is another county).

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