Question: I am a senior citizen and want to know what advantages I have when I sell my home? I have owned my home for thirty years and I am moving to a smaller condo situation. I live in Orange County.
Answer: There is one big advantage that you will likely qualify for when you sell and that is Prop 60. That allows you to transfer your tax base from your current residence to the new residence. If you purchased your current home thirty years ago you likely paid $100,000 or so for that home and it may have been less. As a result of Prop 13 your property taxes have remained very low over all those years compared to those who recently purchased a similar type of home. You may be selling your home now for $500,000, quite an increase over those thirty years! Let me just assume that you are going to purchase your condo and the cost will be $350,000. Prop 60 applies if you are moving within Orange County and you qualify based on several factors. You must be over 55 years of age (or your spouse must be at least 55). The new condo purchase price is not more than 5% higher than the selling price of your current residence, if you sell first and then buy within one year. If you purchase within two years, then the new home can be 110% of the value of the sale of the previous home. If you buy the condo first and then sell the original home, then the purchase can’t be greater than the old home. You can imagine the savings that will provide on your new condo. You will save thousands each year by taking advantage of that provision. If you are moving from Orange County and going to Los Angeles County, then you would fall under Prop 90 for moving into a different county. By the way, only eight counties in California have reciprocal agreements, so be sure if you are moving out of Orange County that the new county will accept this transfer of value. If you want to check out all the provisions of these propositions then check out the Orange County Assessor’s webpage as they have a complete list of questions and answers on this topic. You must file a form to take advantage of this and those are also available on the website. You have three years to file but, of course, I would recommend you do it immediately after you have sold the first home and purchased the second. You can only use this provision one time in your lifetime.