Back in 1986, California voters passed Proposition 60 to provide qualified homeowners with a one-time tax break when transferring their principle residence to a replacement dwelling located in the same county, under certain conditions.
Prop. 60 was designed to help longtime California homeowners who want to downsize to a smaller home but don’t want to give up the low property-tax assessment they may have in their existing home. Despite the recent decline in property values, many longtime homeowners would face a big property-tax increase, even if they bought a smaller home.
Under Proposition 13, homes are reassessed for property-tax purposes when there is a change in ownership or new construction. And in between ownership changes, the assessed value can go up by an inflation rate not to exceed 2 percent a year. (Homeowners can get temporary reductions when property values go down.)
Prop. 60 lets homeowners 55 or older transfer their base-year value from an existing primary residence to a new primary residence, but there are restrictions.
There are some eligibility requirements so be sure your situation applies. And always check with a tax specialist for information and guidance on your particular situation.
