Propositions 60 / 90 / 110
Frequently Asked Questions
Source: California State Board of Equalizatio www.boe.ca.gov
What are Propositions 60 and 90?
Propositions 60 and 90 allow senior citizens to transfer the adjusted base year value from their current home to a replacement dwelling. Certain requirements must be met.
In general, if you or your spouse is age 55 or older, you or your spouse may buy or construct a new home of equal or lesser value than your existing home and transfer the adjusted base year value of your existing home to your new home if certain requirements are met. This is a one-time-only benefit. Thus, once you have filed and received this tax relief, neither you nor your spouse (if your spouse is a record owner of the replacement dwelling) can ever be granted this benefit again. The only exception is if you or your spouse becomes disabled after receiving this tax relief for age. If this happens, you or your spouse may transfer the base year value a second time based up the disability. The relief for disability involves a different claim form.
What is the difference between Proposition 60 and Proposition 90?
Proposition 60 relates to transfers of base year values between properties located within the same county. Proposition 90 relates to transfers of base year values from an original property in one county to a replacement property in another county within California. For a transfer to be eligible under Proposition 90, the county in which the replacement property is located must have adopted an ordinance that allows such transfers. Currently, the following eight counties have passed ordinances authorizing these intercounty transfers:
- El Dorado
- Los Angeles
- San Diego
- San Mateo
- Santa Clara
This list may change at any given time. Please call your county assessor’s office to check if your county has passed such an ordinance.
What is Proposition 110?
Proposition 110 extends the benefits of Propositions 60/90 to qualified disabled homeowners of any age. Other than the age factor, the same requirements under Propositions 60/90 must be met. Effective September 25, 1996, qualified persons who had prior claims based on age may file a second claim based on disability. However, once a person qualifies due to disability, he or she may not receive the base year value transfer benefit due to age.
What are the eligibility requirements for Propositions 60/90?
- You, or a spouse residing with you, must have been at least 55 years of age when the original property was sold.
- The replacement property must be your principal residence and must be eligible for the homeowners’ exemption or disabled veterans’ exemption.
- The replacement property must be of equal or lesser “current market value” than the original property. The “equal or lesser” test is applied to the entire replacement property, even if the owner of the original property purchases only a partial interest in the replacement property. Owners of two qualifying original properties may not combine the values of those properties in order to qualify for a Proposition 60 base-year value transfer to a replacement property of greater value than the more valuable of the two original properties.
- The replacement property must be purchased or built within two years (before or after) of the sale of the original property
- To receive retroactive relief from the date of transfer, you must file your claim within three years following the purchase date or new construction completion date of the replacement property.
- Your original property must have been eligible for the homeowners’ or disabled veterans’ exemption either at the time it was sold or within two years of the purchase or construction of the replacement property.
The original property must be subject to reappraisal at its current fair market value at the time of sale, unless the buyer(s) of your original property also qualify the property as a replacement property for a base year value transfer due to disaster relief or a base year value transfer for a severely and permanently disabled person. Therefore, most transfers between parents and children will not qualify.
This is a one-time only benefit. Once you have filed and received this tax relief, neither you nor your spouse who resides with you can ever file again, even upon your spouse’s death or if the two of you divorce. The only exception is that if you become disabled after receiving this tax relief for age, you may transfer the base year value a second time because of the disability, which involves a different claim form.
If I qualify for Proposition 60 benefits, do I still need to file for a homeowners’ exemption on the replacement property?
Yes. The exemption is not granted automatically and must be filed for separately.
How many times can one receive the benefit of Propositions 60/90?
As a senior citizen, one may transfer his or her base year value only once, with the one exception that if a person first received relief for age and subsequently became severely and permanently disabled after the date of the original claim and had to move because of the disability (Proposition 110), then the base year value may be transferred a second time. The base year value transfer, however, is not available in the reverse situation; if one receives the benefit due to disability, then they cannot subsequently claim the relief for age.
What does “equal or lesser value” of a replacement property mean?
The market value of the replacement property as of the date of purchase must be equal or less than the market value of the original property on the date of sale. The meaning of “equal or lesser value” depends on when you purchase the replacement property. In general, equal or lesser value means:
- 100% or less of the market value of the original property if a replacement property were purchased or newly constructed before the sale of the original property, or
- 105% or less of the market value of the original property if a replacement property were purchased or newly constructed within the first year after the sale of the original property, or
- 110% or less of the market value of the original property if a replacement property were purchased or newly constructed within the second year after the sale of the original property.
In determining whether the “equal or lesser value” test is met, it is important to understand that the market value of a property is not necessarily the same as the sale or purchase price. The assessor will determine the market value of each property. If the market value of your replacement dwelling exceeds the “equal or lesser value” test, no relief is available.
When making the “equal or lesser value” comparison, is a simple comparison of the sales price of the original property and the purchase price of the replacement dwelling all that is needed?
No, the full cash value of the original property as of the date of its sale must be compared with the full cash value of the replacement property as of its date of purchase or completion of new construction. However, property tax laws presume that the purchase price paid in a transaction is the full cash value unless evidence shows that the real property would not have transferred for that price in an open market transaction.
If the full ca
sh value of the replacement dwelling does not satisfy the “equal or lesser value” test, can a claimant receive partial benefit?
No. Unless the entire replacement dwelling satisfies the “equal or lesser value” test, no benefit is available. It is “all or nothing.” Partial benefits are not granted.
How do I file for Proposition 60/90 tax relief?
After both transactions are complete, an application must be filed with the county assessor where the replacement property is located. The claim form, BOE-60-AH, Claim of Person(s) at Least 55 Years of Age for Transfer of Base Year Value to Replacement Dwelling, may be obtained from the assessor’s office. Some counties offer a downloadable form from their internet website, which can be accessed via the Board’s website: www.boe.ca.gov/proptaxes/assessors.htm.
Realtors are not tax attorneys or accountants. We do not give legal or tax advice, please, always seek the advice of your tax attorney/accountant.