On November 4, 1986, California voters approved Proposition 60, which allows eligible homeowners to transfer the base-year value of their primary residence to a replacement property within the same county under specific conditions.
To qualify for this exclusion, the following requirements must be met:
1. Age Requirement: At the time of transferring the original property, the seller must be at least 55 years old. (If married, only one spouse needs to meet the age requirement and must live in the residence. Similarly, for co-owners, only one co-owner must be at least 55 years old and residing on the property.)
2. Timing of the Replacement Property: The replacement property must be purchased or newly constructed on or after November 5, 1986. Additionally, the purchase or construction of the replacement property must occur within two years before or after the sale of the original residence.
3. Reassessment Eligibility: The sale of the original property must result in a reassessment due to its transfer.
4. Exemption Eligibility: The primary claimant must have been either (1) receiving or qualified to receive a Homeowner’s Exemption, or (2) receiving a Disabled Veteran’s Exemption on both the original and replacement properties.
5. Market Value Limitation: The market value of the replacement property must be “equal to or less than” that of the original property. Specifically:
- If the replacement is purchased before the sale of the original property, its value must not exceed 100% of the original property’s market value at the time of sale.
- If purchased within one year after the sale, the replacement property’s value may go up to 105% of the original property’s market value.
- If purchased within two years after the sale, the replacement property’s value may reach up to 110% of the original property’s market value.
6. Single Use Rule: Relief under this provision can only be granted once for the claimant and/or their spouse. All applicants must disclose their Social Security numbers for verification purposes, ensuring no multiple claims are made across different counties. This information is used solely for verification and is not available for public inspection.
If you believe you meet the criteria for this exclusion, you are required to provide proof and/or declare under penalty of perjury that you are at least 55 years old. Additionally, you must complete the necessary claim form to apply for this benefit.
Frequently Asked Questions
Q. If there are multiple co-owners of a replacement property, is it sufficient for only one person to be 55 or older at the time the original property is sold to qualify?
A. Yes, only one co-owner who is a qualified record owner of the original property and resides in it must be at least 55 years old. If the co-owner is married, their spouse must also meet the residency requirement.
Q. Can a homeowner take advantage of Proposition 60 multiple times throughout their life?
A. No, this benefit is available only once in a claimant’s lifetime. Homeowners who have already been granted this exclusion cannot apply again.
Q. Is comparing the sales price of the original home to the purchase price of the replacement property sufficient to meet the “equal or lesser value” test?
A. No, the comparison is based on the full market value of both properties, not the sales or purchase price alone. The assessor determines the market value of the properties, which may differ from their transaction prices.
Q. What happens if the market value of my replacement home slightly exceeds the “equal or lesser value” test? Can I still receive a partial benefit?
A. No, partial benefits are not granted. The replacement property must fully meet the “equal or lesser value” requirement to qualify for the exclusion.
Q. If two individuals each sell their own original properties, can they combine their claims for Proposition 60 when jointly purchasing a single replacement home?
A. No, the benefit applies to one individual or the other—not both. Each person must independently compare their original property to the jointly acquired replacement home.
Q. Can I gift my original home to my child and still qualify for the Proposition 60 benefit when I buy a replacement property?
A. No, transferring the original property as a gift to another individual disqualifies the transaction for the purposes of the Proposition 60 exclusion.
Q. Can I sell or gift my original property to a child and still qualify for Proposition 60 benefits?
A. No. The law requires that the original property must be sold for consideration and reassessed at full market value at the time of sale. Properties transferred as gifts, inheritances, or other non-sale transactions do not qualify.
Q. Does Proposition 60 prevent the assessor from issuing supplemental assessments when the base-year value is transferred to a replacement property?
A. No. By law, the assessor must issue supplemental assessments (positive or negative) for any transaction resulting in a base-year value change. This includes Proposition 60 claims. The adjustment is based on the difference between the factored base-year value of the original property and the replacement dwelling.
Q. If my application is approved, do I still need to pay the secured tax bill at the higher value?
A. Yes. Both installments of the secured tax bill must be paid as billed. Any reduction in value will be issued as a refund in the form of a negative supplemental adjustment. However, refunds may take time to process and may not be received before the next installment is due.
Q. If the base-year value of my original property is $60,000 and the replacement dwelling has a roll value of $40,000, will there be a supplemental assessment for $20,000?
A. Yes, as long as the market value of the replacement dwelling exceeds the newly transferred base-year value. A supplemental assessment is issued for the difference between the transferred base-year value and the current roll value.
Q. Is the replacement property eligible if acquired within two years of selling the original property?
A. Yes, as long as the replacement dwelling is acquired on or after November 6, 1986. The purchase or construction of the replacement home must occur within two years before or after the sale of the original residence.
Q. If I purchase a lot and build a new home, does the construction need to be completed within two years?
A. No. The lot must be purchased before or after the sale of the original property, but the construction of the home must be completed within two years of the sale of the original residence.
Q. Can multiple co-owners of an original property receive Proposition 60 benefits on separate replacement dwellings?
A. No. Only one co-owner of an original property may claim the benefit unless the property was a multi-residential dwelling where separate portions were eligible for homeowner’s exemptions.
Q. Can a mobile home qualify for Proposition 60 when replacing it with another property?
A. Yes, but only if the mobile home is classified as real property. Mobile homes not enrolled as real property are ineligible because there is no real property base-year value to transfer.
Q. Can I transfer my property tax base from a property outside Contra Costa County to one within the county?
A. No. Transfers between counties are only allowed under Proposition 90 if the county accepting the replacement property has passed an authorizing ordinance. Contra Costa County repealed Proposition 90 on November 8, 1993.