Del Mar - Encinitas - La Jolla - coastal San Diego real estate

 Many retirees and older homeowners are faced with a dilemma when the kids grow up and move out. Do they stay in their oversized home and enjoy the benefits of a smaller, Prop 13-protected tax base or relocate to a smaller and perhaps newer home that better meets their current needs-but be faced with a high property tax bill based on current "hot" property values? Well, relief has arrived in the form of Proposition 90, enacted and adopted by nine California counties to address this very issue.

As of February 1997, the provisions of Proposition 90 permit qualifying California seniors who move from anywhere in California into a qualifying county, to take with them their former Proposition 13 tax base.

In order to qualify, the replacement principal residence must be purchased or newly constructed in the qualifying county on or after May 4, 1992, and within two years before or after the sale of the original residence. Claims must be filed within three years of the date the replacement residence is purchased or its construction is completed.

The principal claimant must be at least 55 years of age at the time the original residence was sold, and must be an owner and resident of the original property at the time of its sale or within two years of the purchase or new construction of the replacement dwelling.

The sale of the original principle residence must also qualify for reassessment under the provisions of the California Revenue and Taxation Code, or must result in a base­year value determination because the property qualifies as replacement residence.

In addition, the principal claimant must have been receiving or eligible for a Homeowners' Exemption, or receiving a Disabled Veterans' Exemption, on the original property, either at the time of sale or within two years of the purchase or new construction of the replacement dwelling.

The replacement residence must be of equal or lesser value than the original residence. Equal or lesser value is defined as 100% of the market value of original property as of its date of sale if a replacement dwelling is purchased before an original property is sold; 105% of market value of the original property as of its date of sale if a replacement dwelling is purchased within one year after the sale of the original property; 110% of market value of the original property as of its date of sale if a replacement dwelling is purchased within the second year after the sale of the original property. The claimant may only receive a replacement property base year value transfer once.

For the protection of the real estate broker and the taxpayer, before listing the original residence of a client for sale, the agent must inquire with the Assessor's office in the county to which the client is planning to relocate to verify its current status with regard to Proposition 90.

Information taken from an article by Marc S. Weissman, Esq., Certified Specialist in Estate Planning, Trust and Probate Law by the California Board of Legal Specialization of The State Bar of California, and reprinted with permission of the author. For more information, Mr. Weissman takes questions on Real Estate Law at his website, http://www.wwlaw.com