I heard that when moving within California that some counties will retain your previous property taxes. True?

Question

As an example your current taxex are 4000 and you move to a 1 million dollar home - is there any way that property taxes can be retained at the lower value?

Answer 1

bostonianinmo generally knows the correct answer, but in this case he doesn't know California law.

CA Proposition 60 allows a homeowner over 55 to sell his home and purchase a home for no more than the selling price of his old home, to retain the same property tax under certain conditions. This law was passed to allow older homeowners to "downsize" their home and not get hit with higher property taxes. Because Proposition 13 passed by the voters in the 1970s limited the property tax to 1% of the purchase price of the home and then limited the annual increase to no more than 2%. A homowner who purchased a home for $60,000 in 1974 had an initial property tax of $600 per year. The property tax could (and did) increase by 2% a year, so that in 2004 the property tax bill was $1087 per year. However, the houses in CA became very expensive. That $60,000 home could be sold for $500,000 in 2004. If the home owner wanted to purchase a smaller retirement home he would have to pay $350,000 or more and incur a property tax bill of $3,500 per year. With Proposition 60, he could transfer his old property tax to the new home and pay only $1087 per year.
This is a ONE TIME ONLY transfer, and the house must be in the same county or in cooperating counties. The list of cooperating counties in CA has continued to shrink. But of course you can still transfer the tax within any CA county.
There are some additional bells and whistles associated with Prop 60 and a subsequent Prop extending the provision to people who are disabled. Do a search on California Proposition 60 to learn more.

Answer 2

In California, Certain counties DO have reciprocal agreements, with restrictions. Or you can stay in the same county.

I think that you MUST be at least 55, and the new property that you are buying MUST be lower in value than what you have sold.

The reason is that an older person may have bought a home 40 years ago for $40K, with property taxes of about $600 a year today. (If the house is worth $1 million today, the property taxes would be about $12,000)

If they sell the house today, as long as they move to a cheaper property, they MAY be able to transfer their property tax base of $600 to a property worth less than $1 million.

Property Taxes go to the county, so it's up to the county if they will accept this. I think that San Diego and Riverside have this agreement. If you move out of San DIego into Riverside Cty, on a $600k house, the property taxes would be over $7,000.

By allowing you to pay your fixed $600 from the San Diego home, Riverside County is not getting what they would get from a "normal" buyer, that is why reciprocal agreements are needed.

The reasoning behind it is so a senior will not have property taxes go from $600 to $7,000 !

Call the county assessor in BOTH counties that you are considering to get the exact rules.

Great Question... Hope this helps

Answer 3

Nope. Property taxes are tied to the property, not you.