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Ruben Lopez: Dispelling Some of the Myths About Proposition 60

The law lets homeowners age 55 or older transfer their property tax basis, but how does it work?

For some homeowners looking to downsize, Proposition 60 can provide instant, significant savings.

The law allows homeowners age 55 or older to transfer their existing property tax basis to a new home of equal or lesser value. The following is a quick Q&A to help homeowners dispel some of the myths about Proposition 60 and to understand exactly how the law works.

Myth No.1: All co-owners of a replacement dwelling need be at least age 55 as of the date of sale of an original property.

The truth is that only one claimant out of several co-owners of a replacement dwelling needs to be 55 as of the date of the sale of the original property. But the claimant must be an owner of record, and either the claimant or their spouse also must have been an occupant of the original property.

Myth No. 2: A taxpayer may apply for and receive the benefit of Proposition 60 more than once.

Not true. You are not eligible if you have been previously granted this benefit.

Myth No. 3: I can’t receive the Proposition 60 base-year transfer if my claim is filed more than three years after purchasing or constructing my replacement property.

Actually, as of Jan. 1, 2007, the assessor is allowed to grant late-filed Propositions 60/90/110 base-year transfers on a prospective basis only if all other requirements of section 69.5 are met and the replacement property has not been transferred to a third party. The effective date of the base-year value transfer would be the lien date of the assessment year in which the claim is filed.

Myth No. 4: My replacement property must always be valued less than my original property.

In fact, the replacement property’s market value can exceed the value of the original property. In general, “equal or lesser value” means:

» 100 percent of the market value of an original property if a replacement dwelling is purchased before the original property is sold, or

» 105 percent of the market value of an original property if a replacement dwelling is purchased within one year after the sale of the original property, or

» 110 percent of the market value of an original property if a replacement dwelling is purchased within the second year after the sale of the original property.

Learn more about transferring property taxes through Proposition 60 at a seminar at 5 p.m. Thursday at the Goleta Public Library, 500 N. Fairview Ave. Joe Holland, Santa Barbara County clerk, recorder and assessor, will be the featured speaker. RSVP to 805.961.2733 or .(JavaScript must be enabled to view this email address).

— Ruben Lopez of Prospect Mortgage is a public-relations coordinator for the Santa Barbara Association of Realtors.

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