California Association of Realtors are reactivating proposing an initiative to allow homeowners 55 and older to be able to transfer their home's tax base to any County in California. If enough
Proposed Changes to Prop 13 and Prop 90 - 2020
California Association of Realtors are reactivating proposing an initiative to allow homeowners 55 and older to be able to transfer their home's tax base to any County in California. If enough signatures are attained, this proposal would be on the ballot in the 2020 election.
If you recall, Prop 5 was up for passage at the 2018 election. It did not get enough support from voters in California to pass. The new initiative is similar to Prop 5 which a few alterations.
The revised proposition is titled: "The Family home protection and fairness in property tax act of 2020".
Property tax protection for seniors, severely disabled and victims of wildfires.
A little history. First there was Prop 13 passed in 1978 that stated real estate taxes would be based on the purchase price of a home rather than current market value. Most everyone who owns a home, especially seniors are aware of Prop 13. Then came Prop 60 to allow homeowners to transfer their tax base to the County where the house was located
Prop 90 passed in 1988 broadened prop 60 to allow transfers to other counties in the state, yet it was up to the individual counties to participate. Not all counties came on board. There are currently 10 counties in the program.
So what’s new about this proposal:
· Allows for homeowners to transfer tax base up to 3X rather than unlimited (original Prop 5)
· Intergenerational transfers of homes to heirs preserves the tax base only if the property is used a the primary personal residence of the heirs. Meaning if the heir does not live in the property and use it as a rental, the home will be taxed at current market value. This would be an amendment to Prop 13, which allows transfer of tax base regardless of residency.
· There are 4.1 million homeowners age 55 or older and it is anticipated if allowed to move to other counties this would generate anywhere from 67,000 to 90,000 transactions per year.
· Many seniors who want to downsize and relocate to another area feel stuck because of the limits on where they can transfer their tax base.
Will this new proposal free up homes and generate millions of dollars predicted? Who knows what the effect will be……yet the current laws are not giving seniors any incentive to sell the big home and move to a lesser area.
I believe that owning a home is what most folks want. Your first home may not be your dream home, it is a start. And it's not just an investment. To some it is security, to others it's pride of owners....