This is a question I'm being asked more often and I'm assuming it's due to the baby boomers now looking to retire and down size. See below for frequently Q and A's on this topic. and as always, you can always reach me at 323 974-6119 for more information or questions not covered here.
Q 1. Is there a property tax reassessment exemption for taxpayers 55 years of age or older?
A Yes. Under certain conditions as described below, a taxpayer who is 55 years of age or older may transfer the Proposition 13 base-year assessment value of his or her principal residence to any replacement dwelling of equal or lesser value in the same county and, sometimes, in another county (Cal. Rev. & Tax Code § 69.5(a)(1)and (2)).
Q2. Must the sale of the original property and the purchase of the replacement dwelling happen at the same time?
A No. A taxpayer has either two years before the sale of the original dwelling or two years after the sale of the original dwelling to purchase or construct the replacement property. For this purpose, a "sale or purchase" occurs when title to the property is transferred (e.g., date of close of escrow). "Construction" occurs as of the date of completion. The taxpayer must actually own and occupy the new property as his or her principal residence within this period.
(Cal. Rev. & Tax Code §§ 69.5(a)(1) and (b)(5).)
Q 3. If the replacement dwelling is purchased or constructed before the original property is sold, can the base-year value be transferred at the time of the purchase or construction?
A No. The base-year value of the original property cannot be transferred to the replacement dwelling until the original property is sold. In this case, the taxpayer would pay taxes on the new residence based on its purchase price until the old residence is sold. ( Cal. Rev. & Tax Code § 69.5(b)(4).)
Q 4. What sort of property is eligible for this reassessment exemption?
A This exemption is available for any dwelling owned and occupied by a taxpayer as his or her principal residence, unless the dwelling is receiving a different real property exemption. The dwelling may be a single family home, a unit in a common interest development (e.g., co-op, condo, townhouse) or a mobilehome. (Cal. Rev. & Tax Code §§ 69.5(b)(7)and (c).)
Q 5. Under what circumstances can a mobilehome owner qualify for this reassessment exemption?
A As long as the mobilehome is subject to property taxation and the other requirements stated above are met, the taxpayer is eligible whether he or she owns the mobilehome only, or both a mobilehome and the land beneath it. If either mobilehome or combination of mobilehome and land on which it is situated constitutes a taxpayer's original property, the assessor will transfer to the taxpayer's replacement dwelling the base-year value of the mobilehome or the base-year value of the mobilehome and the land, whichever is appropriate. Land owned by the claimant includes a pro-rata interest in a resident-owned mobilehome park. (Cal. Rev. & Tax Code § 69.5(c)(2).)
Similarly, if either the mobilehome or mobilehome and land constitutes a taxpayer's replacement dwelling, the assessor will transfer the base-year value of the original property either to the mobilehome or to the mobilehome and land, as is appropriate. However, land constituting a part of the replacement dwelling includes only an "area of reasonable size which is used as a site for a residence." (Cal. Rev. & Tax Code §§ 69.5(c)(2) and (g)(3).)
Q 6. Must a taxpayer actually live in the original property or the replacement property in order to be eligible for this exemption?
A Yes. In order to claim this exemption, a taxpayer must be both an owner and resident of the original property either at the time of the sale of that property, or within two years of the purchase or new construction of the replacement dwelling, and the property must be his or her principal residence. Moreover, a taxpayer is not eligible for the tax relief until he or she actually owns and occupies the replacement dwelling as his or her principal place of residence. (Cal. Rev. & Tax Code §§ 69.5(b)(1) and (4).)
