Yesterday some clients of mine asked me about seniors selling their home and purchasing another residence while keeping the older, lower property tax rate. I did a little digging and thought I’d share what I found.

There are actually two propositions involved.  Prop 60 applies to moves within Santa Clara County, and Prop 90 relates to moves between counties which are participating in this benefit to seniors (only these few, as of the date of this posting: Alameda, Los Angeles, Orange, San Diego, San Mateo, Santa Clara, Ventura).

Some of the basics:

• Homeowners 55 and older at the time of sale of the original property.
• Homeowner must be on record both for the home that’s sold and the replacement property.
• The replacement residence must be equal to or lesser in value than the original residence.
• There are special rules for multi-family (duplex, triplex, fourplex) properties and for mobile homes.

In the most typical scenario, a senior homeowner would sell a house (or townhome or condo) and “downsize” to another, less expensive, smaller house or condo.  If the homeowner had been in the first property for a very long time, then the low tax rate would be hard to give up, but Props 60 and 90 enable that homeowner to go to another, less expensive home and carry the old tax rate along – one time, and either in the home county or in one of the participating counties. 

I have known seniors to sell a house in Los Gatos, Saratoga or San Jose and move to The Villages or to gated senior communities out of the area but closer to their grown kids and make use of these two propositions.

For more information and to get all the details, please click on the links above.