California’s Prop 60 Saves Thousands of Dollars for Many

Proposition 60 was passed on November 6, 1986 to allow homeowners over the age of 55 to obtain tax relief by transferring the base year tax value of their current home to a replacement dwelling within the same county.

Without Prop 60 the replacement dwelling would be appraised and assessed at its fair market value at the time of purchase. Proposition 60 enables certain homeowners to “downsize” without incurring added financial impact of higher property taxes.

To qualify for the program applicants and properties must meet certain requirements as per the California Board of Equalization.

In summary, the requirements to qualify for and comply with Prop 60 are:

  • The replacement residence must be purchased or newly constructed within two years (before or after) of the sale of the original residence. The purchase or new construction of the replacement dwelling must include the purchase of that portion of land on which the replacement dwelling will be situated.
  • The principle claimant or the claimant’s spouse who resides with the claimant must be at least 55 years of age at the time the original residence was sold. The claimant must be an owner of record of both the original and replacement residences.
  • The sale of the original residence must qualify for reassessment under the provisions of California Revenue and Taxation Code Section 110.1.
  • The principle claimant must have been either:
    i. Receiving, or eligible for, a Homeowner’s Exemption, or
    ii. Receiving a Disabled Veteran’s Exemption on the original and replacement residences.
  • The replacement residence must be equal to or lesser in value than the original residence. “Equal to or lesser in value” has been defined as: 100 percent of the market value of the original property as of its date of sale if the replacement dwelling is purchased before the original property is sold; 105 percent of the market value of the original property as of its date of sale if the replacement dwelling is purchased within one year after the original property is sold; or 110 percent of the market value of the original property as of its date of sale if the replacement dwelling is purchased between one and two years after the original property is sold.
  • Special rules apply to multi-unit dwellings and mobile homes.
  • Relief pursuant to Section 69.5 (Proposition 60 and 90) of the Revenue and Taxation Code can be granted only once, except for certain circumstances regarding severely and permanently disabled persons as defined in Revenue and Taxation Code Section 74.3.

Claims must be filed within three years of the date the replacement residence is purchased or newly constructed. Application forms, additional information and the required claim form may be obtained by contacting the Real Property Division of the Santa Clara County Assessor’s Office.

Assessor Real Property
70 West Hedding St., East Wing
San Jose, CA 95110
Phone: 408-299-5300
Email: RP@asr.sccgov.org
Fax: 408-298-9439

These calculations should be included as part of every all real estate strategy especially for those contemplating long term lifestyle planning. For additional information on Propositions 60, 90 and 58 please do not hesitate to contact me. I welcome your call or email.