Palm Springs City Limits
Starting on September 19, 2013, Riverside County is going to reinstate Proposition 90 tax incentives to homeowners moving into the area. Propositions 90 is a constitutional amendment that was passed by California voters in June of 1978, which provides property tax relief for persons aged 55 and over.
Implemented by section 69.5 of the Revenue and Taxation Code*, Proposition 90 allows people who are 55 and over, under certain conditions, to transfer a property’s factored base year value from an existing residence to a replacement residence in another county that allows the transfer.
Currently, there are 8 counties in the State of California that allow the use of Proposition 90 intercounty transfers. They are: Alameda, Los Angeles, San Diego, Santa Clara, El Dorado, Orange, San Mateo, and Ventura.
What does this mean to you if you move to Palm Springs or any city in the Coachella Valley? Let’s say your tax base on the home you had owned for over 30 years was $2000 per year. According to the rules of Proposition 13, the purchase of your new home would assessed at the current market value.
You purchase a home in Palm Springs for $500,000, and the current Propostion 13 tax rate is 1%, which would give you a yearly tax bill of $5000 and some change.
The provisions of Proposition 90 may result in significant tax savings since it allows the adjusted base year value of the original (sold) property to be transferred to the newly purchased or constructed home if eligibility requirements are met.
That could be a savings of $3000 per year!!
According the California State Board of Equalization, the requirements to use Proposition 90 are as follows:
- You, or a spouse residing with you, must have been at least 55 years of age when the original property was sold.
- The replacement property must be your principal residence and must be eligible for the homeowners’ exemption or disabled veterans’ exemption.
- The replacement property must be of equal or lesser “current market value” than the original property. The “equal or lesser” test is applied to the entire replacement property, even if the owner of the original property purchases only a partial interest in the replacement property. Owners of two qualifying original properties may not combine the values of those properties in order to qualify for a Proposition 60 base-year value transfer to a replacement property of greater value than the more valuable of the two original properties.
- The replacement property must be purchased or built within two years (before or after) of the sale of the original property.
- To receive retroactive relief from the date of transfer, you must file your claim within three years following the purchase date or new construction completion date of the replacement property.
- Your original property must have been eligible for the homeowners’ or disabled veterans’ exemption either at the time it was sold or within two years of the purchase or construction of the replacement property.
The original property must be subject to reappraisal at its current fair market value at the time of sale, unless the buyer(s) of your original property also qualify the property as a replacement property for a base year value transfer due to disaster relief or a base year value transfer for a severely and permanently disabled person. Therefore, most transfers between parents and children will not qualify.
This is a one-time only benefit. Once you have filed and received this tax relief, neither you nor your spouse who resides with you can ever file again, even upon your spouse’s death or if the two of you divorce.
The only exception is that if you become disabled after receiving this tax relief for age, you may transfer the base year value a second time because of the disability, which involves a different claim form.
Starting on September 19, 2013, Riverside County is going to reinstate Proposition 90 tax incentives to homeowners moving into the area. Propositions 90 is a constitutional amendment that was passed by California voters in June of 1978, which provides property tax relief for persons aged 55 and over. Implemented by section 69.5 of the Revenue and Taxation Code*, […]
The recently contained Mountain Center fire burned over 27,000 acres, threatened the town of Idyllwild, thousands of people evacuated, and several homes destroyed but no one was hurt or killed. The fire could be seen for miles. The smoke and ash turned blue skies into a thick, murky haze. The ash was coming down like […]
This is a picture of my neighbor’s home in Vista Las Palmas. I don’t know his name but I see him out a few times a week, trimming his ficus hedge and making sure it looks pristine & perfect. True pride of home ownership. The buzz around the City of Palm Springs is a possible ordinance […]
The National Association of Realtors (NAR) came out with their June Sales report and it shows that U.S home sales fell 1.2% but inventory of homes is up by 1.9%. Jed Kolko, chief economist for Trulia.com, talks about the NAR report to the CBS Morning News in the video below: The same trend is happening […]
“I See Dead People” I love that iconic line from M. Night Shyamalan’s movie, The Sixth Sense. Several years ago, I wrote an article called “What’s in Your Backyard”. It was a story about how many places in Palm Springs I had not visited since moving here in 1999. I live in the Vista Las Palmas neighborhood […]