Posted by Blueink_CA on 7/1/06 8:49pm
Msg #130286

Property tax question

I have heard by two realtors recently, about a new law regarding property tax. If you are 55 or over, and purchasing another home in CA, your current property tax is transferred to the new home. Have any of you heard this? More info? Stipulations? TIA.

Reply by GWest on 7/1/06 11:06pm
Msg #130292

This has been in effect for quite awhile. Not all counties will allow you to transfer, so if you move to a different county within the State of CA, you need to check with the tax collector in the county you are moving to, to see if they will allow you to transfer your tax basis. Also, it is my understanding (don't take me to the bank on this), you must purchase a property who's value is 110% or less of the sales price of your existing home (meaing that if you sell a property for $500,000 your new purchase price can not exceed $550,000).

Reply by John_NorCal on 7/2/06 9:04am
Msg #130325

The informatin I have received is that the new property must be the same as or lesser in value. Good luck finding that !

Reply by GWest on 7/2/06 10:25am
Msg #130334

In researching the requirements to transfer a seniors tax basis within the State of California the rules are that the replacement property must be of equal or lesser value. The States defination of equal or lesser value is:
"In general, equal or lesser value means that the fair market value of the replacement property on the date of purchase or completion of construction does not exceed 100 percent of market value of original property as of its date of sale if a replacement dwelling is purchased before an original property is sold; 105 percent of market value of original property as of it date of sale if a replacement dwelling is purchased within one year after the sale of the original property; 110 percent of market value of the original property as of its date of sale if the replacement property is purchased within the second year after the sale of the original property."
It depends on when you purchase the replacement property and if the County you are moving to will allow you to transfer your tax basis.

Reply by Blueink_CA on 7/2/06 12:05pm
Msg #130356

Thank's for the great info!

This is invaluable information for all the babyboomers who are reaching retirement age and feel stuck in their homes due to the possible tripling of prop tax for a lateral (pricewise) move. Sounds as if this law makes it affordable to downsize or move out of the hub bub of the city. When the time comes, I will definitely look into this option. Thank's again.