UPDATE: Effective April 2021, Proposition 19 expands tax portability options to many California homeowners. Please read my Proposition 19 article for more updated information.
If you are over 55, or permanently disabled, you may qualify to avoid a full property tax reassessment when you sell one property and buy another. California Propositions 60, 90, and 110 provide tax relief for seniors and disabled home buyers.
Under Proposition 13, a home’s taxable value matches the purchase price upon every sale. Reassessment exclusion programs allow the taxable value on the original home to transfer to the replacement home, thereby preventing an increase in property tax. (You can also read my article about Property Tax Calculation.)
Example of a Property Tax Reassessment Exclusion
Let’s say that you purchased your current home back in 1985. Today, your home is worth $750,000. Thanks to Proposition 13, which limits the annual increase in your assessed value to only 2% maximum per year, your current assessed value is only $250,000.
Now, you want to sell your current home, and move to a new home that costs $500,000. You sell your current home for $750,000, and buy the replacement home for $500,000.
Normally, when you buy a home, the property is automatically reassessed to the purchase price, or $500,000. If you qualify for an exclusion, this won’t happen. The Assessor will allow you to transfer your last home’s assessment value to your new home. In this case, the assessed value maximum is $250,000.
So, instead of paying taxes based on $500,000 value, you pay taxes on only $250,000 value, which may essentially cut your potential property tax bill in half!
For Seniors 55+ – the Proposition 60/90 Reappraisal Exclusion
Here are some guidelines and limitations of the Proposition 60/90 program:
- The replacement property’s purchase price must be equal to or less than the market value of the original property. You don’t get a partial exclusion. If the new property costs more, you don’t qualify.
- You must be 55 or older at the time of the original property’s sale. For married couples, only one spouse must be 55 or older.
- You can only take advantage of this property tax reassessment exclusion once.
- You must buy the replacement home within two years of selling the original property.
- Both properties must be the owner’s principal place of residence.
- New construction qualifies for this program, under certain restrictions. Contact your local assessor’s office first to go over these requirements. In San Diego County, you can call (619) 531-5481.
Proposition 60 allows this property tax reassessment exclusion when buying and selling in the same county.
Proposition 90 was passed to allow people to sell property in one county, and buy in another. Not all counties qualify.
There are currently 11 counties in California that participate in the Proposition 90 program. The counties are: Alameda, El Dorado, Los Angeles, Orange, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Tuolomne, and Ventura. For San Diegans or would-be San Diegans, this means that you can move from anywhere in California to San Diego County, and qualify for the property tax reassessment exclusion.
Since this list may change, please contact the Assessor’s office in the county where you want to buy the replacement property. Check to make sure they accept “Proposition 90 base year value transfers.”
How Do I Apply for Property Tax Reassessment Exclusion?
Be sure to complete and submit the application form within three years of the date you buy the replacement property. You may request an application by calling (619) 531-5481, or download the application here.
For Disabled Home Buyers – the Proposition 110 Reappraisal Exclusion
If you are severely and permanently disabled, you may qualify to avoid property tax reassessment. Like Propositions 60 and 90, Proposition 110 provides some tax relief. If you buy a new home of equal or lesser value than your existing home, you can transfer the old home’s current taxable value to the new property.
You can download an application and certificate of disability here. If you are buying new construction, download the new construction application.
More Property Tax Information
If you haven’t yet read it, please read my Property Tax Calculation article. I explain how property taxes are calculated, and how assessed values increase from year to year. You can also read about the Property Tax Postponement Program and the Disabled Veterans Property Tax Exemption.
San Diego Treasurer-Tax Collector – Office Locations
You can also meet with someone in person to discuss your property taxes. Visit one of the five San Diego Tax Collector offices:
- Main Office – County Administration Center – 1600 Pacific Highway, Room 162, San Diego, 92101
- Chula Vista Branch Office – 590 Third Avenue, Chula Vista, 91910
- El Cajon Branch Office – 200 South Magnolia Avenue, El Cajon, 92020
- San Marcos Branch Office – 141 East Carmel Street, San Marcos, 92078
- Kearny Mesa Branch Office – 9225 Clairemont Mesa Blvd., San Diego, 92123
As always, contact me with any questions. Good luck!
