Palos Verdes Homes Blog: Downsizing Seniors, Don't Leave Your Los Angeles County Tax Relief Behind by Norma Toering

Wednesday, May 5, 2010

Downsizing Seniors, Don't Leave Your Los Angeles County Tax Relief Behind by Norma Toering

Members of the 55 and over club may be feeling a bit left out of the housing stimulus plan. If you've owned your home for thirty years you certainly do not qualify for the $8,000 tax credit, but you may be eligible for the senior citizen's replacement dwelling benefit. Yes, Proposition 60 and 90 allows seniors to keep their property taxes at the same rate they have paid for years.

That's right, longevity counts on this one. If you or your spouse that resides with you is age 55 or older, you may buy or construct a new home of equal or lesser value than your current home and transfer the base value to your new purchase. The property tax demon can no longer hold you hostage in your cavernous home because you are reluctant to part with the owner-friendly annual property tax bill you enjoy due to Proposition 13.

California property is reassessed upon sale. The tax rate is approximately 1.25% of the purchase price when all assessments are added. If you qualify you can take your old tax rate with you. Naturally there are some stringent eligibility requirements.

Primary Requirements:

1. You, or your spouse must have been at least 55 year of age when the original property was sold.

2. Both the original home and the new purchase must be your principal residence.

3. This is a one-time only benefit.

4. The replacement property must be of equal or lesser "current market value" than the original property.

5. Your original property must have been eligible for the Homeowner's or Disabled Verterans' Exemption.

6. Time is a factor. The replacement property must be purchased or built within two year (before or after) of the sale of the original property. If a claim is filed more than three years after purchase or completion of new construction, relief will be granted beginning with the calendar year in which the claim is filed.

There are several other requirements and only a few counties cooperate, so consult a professional before making a downsizing decision. Making the right move will save you thousands of dollars over time. With more funds available your retirement will be a whole lot more fun.

Here are some answers of frequently asked questions from the California Board of Equalization.

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Norma Toering & Team RE/MAX Palos Verdes Realty
(310) 493-8333 / Office Phone: (310) 831-0800

South Bay Los Angeles cities I sell real estate, property, houses and homes in: Palos Verdes Estates, Rolling Hills, Rolling Hills Estates, Rancho Palos Verdes, San Pedro, Long Beach, Torrance, Lomita, Redondo Beach, Hermosa Beach and Manhattan Beach.

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