California Proposition 60

California proposition 60 is an expired California law that allowed senior citizens to move to a new home without a substantial increase in property taxes. It has been replaced by proposition 19.

This post is provided for general information only. Please confirm the details and circumstances of your unique situation with your tax accountant or other appropriate advisor before taking action.

What was the purpose of proposition 60?

Under California proposition 13, real property is initially valued at its fair market value. After that, your property’s assessed value can generally only go up 2% per year even if home values rise by more.

One key limitation of the California value limit is that, by default, it resets when you buy a new home. So moving, even to a home with a lower current fair market value, could result in a large property tax increase.

Proposition 60 let senior citizens make a base year value transfer from their original property to the replacement property. In other words, their new home generally wouldn’t be assessed value at a higher value than their old home.

What does proposition 19 do?

Proposition 19 actually expands the benefits of proposition 60.

Proposition 60 was limited to moves within the same county or moves between certain listed counties. Proposition 19 generally applies statewide. Proposition 19 also loosens up some of the other requirements.

* Proposition 19 also changed a few other property tax rules not related to proposition 60 and not covered by this post.

When did the law change?

Proposition 19 is effective as of 2021.

What does proposition 19 apply to?

Proposition 19 applies to your principal residence. You generally need to move into a purchased or newly constructed residence within two years of selling your original primary residence.

How much is the benefit under proposition 19?

Unlike proposition 19, there is no limit to the value of your replacement dwelling.

If your replacement property is of equal or lesser value of the original property, you transfer your current assessed value.

If your replacement property is worth more than your original property, you transfer your current assessed value and add the difference in current market values to your assessed value.

Easy math examples:

  • You move from a home with a $100,000 assessed value and $200,000 market value to a home with a $200,000 market value. Your new assessed value will remain $100,000.

  • You move from a home with a $100,000 assessed value and $200,000 market value to a home with a $250,000 market value. Your new assessed value will be $150,000 — the $100,000 assessed value plus the $50,000 difference in market value.

How many times can you use proposition 19?

One of the biggest limitations of proposition 60 was that you could only use it once even if your spouse died or you got divorced. Proposition 19 generally allows you to use the base year value transfer three times in your lifetime.

What is the age requirement for proposition 19?

Like proposition 60, you generally need to be age 55 or older to use proposition 19. If you’re married, typically only one spouse needs to meet the age requirements.

Important Note on California Property Taxes

California voters like to pass propositions changing the property tax rules a lot. Please verify the current requirements and details with your county tax collector.

When property tax laws change, people often remain grandfathered in as long as they don’t move, although this is not an absolute guarantee. More importantly, you should be aware for long-term planning that the benefits and planning moves available today may change or no longer be available if you’re planning to move in the future.

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