Protect and Transfer Your Home’s Property Tax Basis to a Replacement Home at Orange County CA

Protect and Transfer Your Home’s Property Tax Basis to a Replacement Home at Orange County CA

Property taxes are very important for home owners in California and Orange County. This especially important because property taxes are based upon assessed values, and home values increased significantly.
People who have owned a home at Orange County for a number of years often ask about protecting their property tax basis when they buy and move to another home.
Ad valorem property taxes in California are primarily guided by California Proposition 13, a constitutional amendment enacted by voters during 1978. CA proposition 13

Annual property taxes according to Proposition 13 to be paid by owners are generally equal to one percent of assessed value of the home each year. (This assessed value can be increased by as much as two percent per year by the county assessor.)

Example: If you buy a home at Orange County CA at price of $700,000, the property value determined by county assessor/tax collector will be $700,000. So your annual ad valorem property tax during first year would be one percent of that – or the amount of $7,000.

If you want to sell your home and buy a replacement home in Orange County, and if you follow California law guidelines, you can sell first and then buy a different home – or you can buy a home in Orange County first and later sell the prior house – while taking advantage of transfer of Proposition 13 property tax basis.

To protect and transfer your home’s property tax basis to another home, you must follow all conditions for qualification and property tax relief as set forth by the Office of Orange County Assessor.

Proposition 60 was a constitutional amendment approved by the voters of California in 1986 – codified in Section 69.5 of the California Revenue & Taxation Code – and allows the transfer of an existing Proposition 13 base year value from a former home to a replacement home, if certain conditions are met.

PEOPLE 55 YEARS OF AGE OR MOREThis benefit is open to homeowners once in a lifetime who are at least 55 years old and are able to meet all qualifying conditions.

The following conditions must all be met for qualification and property tax relief to be granted under California Proposition 60:

a) Both the original property (former residence) and its replacement must be located in the same county. If the replacement property is located in a different county from the original, see possible transfer basis rules set for at California Proposition 90.

b) As of the date of transfer of the original property, the seller or a spouse living with the seller must be at least 55 years old.

c) The original property must have been eligible for the Homeowners’ Exemption or entitled to the Disabled Veterans’ Exemption.

d) The replacement dwelling must be of equal or lesser value than the original property.

e) The replacement dwelling must have been purchased or newly constructed on or after 11/06/86.

f) Without exception, the replacement dwelling must be purchased or newly constructed within two years (before or after) of the sale of the original property.

g) The original property must be subject to reappraisal at its current fair market value as the result of its transfer, in accordance with Sections 110.1 or 5803 of the Revenue and Taxation Code.

h) Without exception, a claim for relief must be filed within three years of the date a replacement dwelling is purchased or new construction of a replacement dwelling is completed.

For detailed information about Orange County CA home selling and possible protection and transfer of property tax basis – click here and see the web site at Office of Orange County CA Assessor.

Possible transferring your property tax basis from a home at Orange County CA while buying a replacement home at another county is a different subject – and covered by California Proposition 90. Orange and Riverside and two of the nine counties in California that are participating with the Prop 90 transfers between counties.

Coldwell Banker residential brokerage

By Harrison K. Long. This is for information only about California law and is not the providing of legal or tax services. For questions about your own situation, you should consult with an experienced real estate attorney and/or with the office of Orange County Assessor where your home is located.

We provide Professional REALTOR® agent representation and help for property owners, home sellers, private trust estate representatives, estate administrators, executors and heirs, probate and trust attorneys, estate planners, income tax professionals, public guardians, fiduciaries, investor group managers, bankers, and individuals, with listing and sale of properties at Orange County, CA. Contact us with your questions about home prices and values at Irvine, Newport Beach, Costa Mesa, and other Orange County CA cities and areas.

Protect and Transfer Your Home’s Property Tax Basis to a Replacement Home at Orange County CA

About Harrison K. Long

Real estate and business attorney. CA State Bar Association attorney member #69137. Professional real estate representative, REALTOR®, GRI, Real estate broker, CALBRE #01410855. Broker associate, HomeSmart Evergreen Realty, Irvine, CA. Providing real estate legal information and services for property owners, estate trustees, executors and administrators, fiduciaries, bankers, investor group managers, with their best decisions about homes and real estate. Orange County REALTORs® (member and prior service on its board of directors). "Realtor of the Year 2016" award by the Orange County REALTORs®. California Association of REALTORs® (now serving on its board of directors). National Association of REALTORs® member. Contact by cell or or text at 949-701-2515.
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