If you’re 55 or older, our state has a very nice gift for you!! Buy a new house and pay the same low California property tax that you do on the home that you’ve owned for years.
The California Revenue and Taxation Code 69.5, enacted by voters under Propositions 60 and 90, allows homeowners over 55 years old to sell their current residence, buy a new home (of equal or lesser current market value of the old home) and avoid a hike in property taxes. It’s a gift, so to speak, and it can open up a world of opportunity for you to live in a dwelling that better fits your current lifestyle and, potentially, enjoy your profits anyway you like.
Are you an empty-nester and want to downsize or just re-locate to a better layout for entertaining? Maybe you don’t want to mow the lawn and deal with repairs of your old home and thinking of a condo. Whatever your reason, this “gift” gives you the freedom to make that move without the tax burden of a new home. If you were to sell your home and buy a new home for less than the sale price of your current one, that could be money in your pocket.
My Mom and Dad, who lived in Florida for years, would have loved something like this. They had a beautiful condo on the ocean, but really wanted a better floor plan. They just couldn’t justify the move due to the tax burden of a new home or condo. If they were in California, and had this option, they would have done it — I know it!
One last point about this benefit, the age is only 55 years old. That is so young, most people are still working and in the prime of their life at that age! If you’ve owned your current home for awhile, then think of this as a special time here in Los Angeles:
- Interest rates are still low.
- The real estate market is on an upward trajectory.
- Inventories of homes for buyers are limited.
- Now is a good time to sell!
Maybe you don’t want to be rushed into buying right now? The tax benefit can be redeemed within two years of the sale of your house. So you can sell now, and take the next 24 months to find your dream home.
This provision in the California property tax code is something you should keep in mind as you start to think about maintaining your lifestyle in retirement. Feel free to give us a call to discuss how this could work for you.
Craig Spano is a Licensed California Real Estate Agent (BRE# 01971165) with Keller Williams. Learn more about Craig by reading his bio. Reach out to him via email or call him directly at 323-486-7786.