Question on prop. 19 (Merced: rental, vacation home, buy)

[davdaven]

Originally Posted by NORTY FLATZ

So, now it's not unusual to see "taxes AND fees" amounting to over 2.5% of a purchase price, with annual increases as fast as the law allows.

Ouch @ 2.5%! I just looked at my tax bill here and it's 1.67%. So much for 1%, huh?

Originally Posted by joosoon

Why does the socal chapter of the ACLU oppose this? It's not even an issue in their wheelhouse.

The ACLU, NAACP, Sierra Club, etc. are taking "positions" on many things now. Every group has its price.

[evening sun]

This is why I always vote NO on bond issues, they get tagged onto the property tax bills.

[NewbieHere]

Originally Posted by sav858

So then Prop 19 in needed for all the rest of CA counties for this type of transfer?

But there more to it, they tack on to tax you. They always do.

[CA4Now]

This is the proposition that is trying to change the current law that currently allows people--including wealthy celebrities--to hand down property to chlldren and grandchildren without having the property reassesed at the time of transfer.

A "no" vote opposes this constitutional amendment, therefore continuing to:

* allow the tax assessments on inherited homes, including those not used as principal residences, to be transferred from parent to child or grandparent to grandchild.

https://ballotpedia.org/California_P...mendment_(2020)

[sav858]

Originally Posted by NewbieHere

But there more to it, they tack on to tax you. They always do.

Like what exactly?

[V8 Vega]

I'm the OP. thanks Norty Flatz that's what I thought. If I move I have to pay taxes based on the new house purchase price as I bought my house after 1978.

[GoldKona]

Originally Posted by V8 Vega

I'm the OP. thanks Norty Flatz that's what I thought. If I move I have to pay taxes based on the new house purchase price as I bought my house after 1978.

Under Prop 60 you can transfer your tax base to another property in your county if you are 55+ and buy equal to or less. So if you have a $800,000 house with a $100,000 tax assessment you can buy another $800,000 or less house and keep that $100,000 tax base.

Under Prop 90 you can do the same transfer to the about 10 counties that allow it.

My understanding of Prop 19 is that you can transfer to any county, do it 3 times and are not limited to dollar amount but the amount over what you sold will be assed to your base value. so in this example if you buy a $1,000,000 you keep the $100,000 tax base but add the difference between $800,000 and $1,000,000 so a total tax assessment of $300,000 on a $1,000,000 purchase.

[SFBayBoomer]

Originally Posted by NewbieHere

He is asking about property tax, not capital gain.

https://www.boe.ca.gov/proptaxes/prop60-90_55over.htm



Here it is, prop60/90 allows you to keep lower base if it’s the same or less, not more. So if you are downsizing then it’s ok. I see no need for prop 19.

Proposition 60 allows for the transfers of a base year value within the same county (intracounty).

Proposition 90 allows for the transfers of a base year value from one county to another county in California (intercounty) but only if the destination county has authorized such a transfer by an ordinance.

Proposition 90 has been extremely unfair for many years. Since 2018 there have been only ten counties that allowed tax transfers into their county. Thus, it has been possible for wealthy San Francisco, Marin County, and Contra Costa county residents (to name three examples of wealthy counties) to transfer into lower priced residences in ten other counties, but they did not allow the reverse. It is extremely difficult to keep to the exact amounts that were written into Prop 90 for replacement properties, which were:

"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 value" than the original 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.

Note: When making the “equal or lesser value” test, it is important to understand that the market value of a property is not necessarily the same as the sale or purchase price.

The replacement property must be purchased or built within two years (before or after) of the sale of the original property"

https://www.boe.ca.gov/proptaxes/prop60-90_55over.htm

Those rules are extremely difficult to put into practice.

In Northern California, the homeowners who have been most discriminated against are those who already own the least expensive properties, because if they try to buy a less expensive property, they would have to go way down in neighborhood or quality of property, thus they haven't used Prop 60/90 and their homes make up the large bulk of properties desired by young families and other workers who want to live close to jobs. Several of my neighbors and I fall into this category.

Now that it appears Prop 19 has passed, I will put my house on the market and not have to worry about trying to keep within a ridiculous 5% or 10% of market value. And I can choose any county in California, just like any other county has been able to choose my county for these many years. It will be much more fair.

By the way, many seniors are interested in 55+ communities, but nearly all of those communities are not in the counties that currently allow transfers into the county, especially the northern California counties. Also, some 55+ communities cost more to buy into than the single family houses in Alameda, San Mateo and Santa Clara counties. One example of that in the SF Bay Area is Rossmoor in Walnut Creek.

Many more houses are going to be on the market in the coming year. I am sure of that.

[CA4Now]

Originally Posted by SFBayBoomer

Now that it appears Prop 19 has passed, I will put my house on the market and not have to worry about trying to keep within a ridiculous 5% or 10% of market value. And I can choose any county in California, just like any other county has been able to choose my county for these many years. It will be much more fair.

Yes, this was pretty much the whole point of Prop 19.

[JGC97]

Originally Posted by SFBayBoomer

Proposition 60 allows for the transfers of a base year value within the same county (intracounty).

Proposition 90 allows for the transfers of a base year value from one county to another county in California (intercounty) but only if the destination county has authorized such a transfer by an ordinance.

Proposition 90 has been extremely unfair for many years. Since 2018 there have been only ten counties that allowed tax transfers into their county. Thus, it has been possible for wealthy San Francisco, Marin County, and Contra Costa county residents (to name three examples of wealthy counties) to transfer into lower priced residences in ten other counties, but they did not allow the reverse. It is extremely difficult to keep to the exact amounts that were written into Prop 90 for replacement properties, which were:

"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 value" than the original 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.

Note: When making the “equal or lesser value” test, it is important to understand that the market value of a property is not necessarily the same as the sale or purchase price.

The replacement property must be purchased or built within two years (before or after) of the sale of the original property"

https://www.boe.ca.gov/proptaxes/prop60-90_55over.htm

Those rules are extremely difficult to put into practice.

In Northern California, the homeowners who have been most discriminated against are those who already own the least expensive properties, because if they try to buy a less expensive property, they would have to go way down in neighborhood or quality of property, thus they haven't used Prop 60/90 and their homes make up the large bulk of properties desired by young families and other workers who want to live close to jobs. Several of my neighbors and I fall into this category.

Now that it appears Prop 19 has passed, I will put my house on the market and not have to worry about trying to keep within a ridiculous 5% or 10% of market value. And I can choose any county in California, just like any other county has been able to choose my county for these many years. It will be much more fair.

By the way, many seniors are interested in 55+ communities, but nearly all of those communities are not in the counties that currently allow transfers into the county, especially the northern California counties. Also, some 55+ communities cost more to buy into than the single family houses in Alameda, San Mateo and Santa Clara counties. One example of that in the SF Bay Area is Rossmoor in Walnut Creek.

Many more houses are going to be on the market in the coming year. I am sure of that.

Good information, SFBB.

I'm happy it's passed. Now ALL counties in the state will be afforded the same courtesy as the big ten that currently have it.

Over the past several days, I've read some pretty crazy comments on the net about how this is going to hurt the state and I have to laugh at just how little those people know what it's about. Thinking it will cost the state money but they forget that the home sold will be purchased at the market rate and that buyer will pay the 1%.

This only helps those older residents who have been wanting to move closer to family because they're reaching a point where they want to stay in their home but maybe need a little assistance.