If you or your spouse is 55 or older, there’s a chance you can downsize (or upsize) to a new property and carry over your current property tax basis. Prop 60/90 are both aimed at providing tax incentives to “senior citizens” aka 55 and older, which, in this day and age, should be referred to as middle aged citizens.
Proposition 60 is a statewide benefit and if both the property being sold and acquired are in the same county, then this proposition would apply. Proposition 90 refers to selling and buying properties in different counties. As of now, only 9 counties participate in prop 90 and those are Alameda, El Dorado, Los Angeles, Orange, Riverside, San Diego, San Mateo, Santa Clara, and Ventura.
Here are your requirements:
1) You must have never made use of prop 60/90 in the past
2) The replacement property must be used as a primary residence and the property sold must also have been a primary residence
3) The replacement property must be equal or lesser market value than the property being sold.
4) The replacement property must be built or purchased within 2 years of selling your original property
5) You or your spouse must be 55 years or older
Your parents, who are over 55 years old, purchased a 3,000 sqft home in 1960 in Malibu for a hefty price of $30,000.
The home is now worth 10 million dollars and they want to move somewhere else
They can sell this home, purchase a replacement property within the same county or if moving into a different counties, one of the 9 counties listed, And as long as the replacement property is 10 million dollars or less, they will retain the property tax basis based on $30,000.