California Propositions Effecting Seniors
Proposition 60Proposition 90
Proposition 58 (Santa Cruz Government)
Proposition 8 Reductions
The Disabled Veteran's Exemption (Santa Cruz County Government)
Proposition 60:
What is Proposition 60?Proposition 60 was passed by the voters on November 6, 1986. It added Section 69.5 to the Revenue and Taxation Code. This Section provides for transfers of base-year values by homeowners who are at least age 55, under certain circumstances.
How does it work?
Basically Proposition 60 allows qualified taxpayers to transfer the assessed value of their original residence to a qualifying replacement dwelling. Without this Section of the code the replacement dwelling would be reappraised at fair market value at the time of transfer. In a sense, this legislation lets older taxpayers downsize without being penalized by higher property tax payments.
Who qualifies for this proposition?
People over 55 years of age (at the time of sale of the original property). If married, only one spouse need be at least 55, but must reside in the residence; the same is true of co-owners.
What property qualifies for this treatment?
- The original property has to be eligible for the Homeowner’s Exemption.
- The replacement dwelling must be of equal-or-lesser value and within the same county.
- The replacement dwelling must be purchased or newly constructed within two years of the sale of the original property.
- A claim for proposition 60 relief must be filed within three years of the date a replacement dwelling is purchased or new construction is completed.
What if my original residence is located outside of Santa Cruz County?
Alameda, Los Angeles, Orange, San Diego, San Mateo, Santa Clara, and Ventura participate. Contra Costa, Inyo, Kern, Riverside, Modoc, Monterey, and Marin have dropped out of the Prop 90 program as of 2005
What if I receive a property by gift or devise?
The replacement property must be purchased or it will not qualify for relief.
How do I file for Proposition 60 relief?
The claim form for Proposition 60 relief may be obtained from the Assessor's Office and is also available online at http://www.co.santa-cruz.ca.us/tax/taxforms.htm
When should I file?
The claim for relief must be filed within three years of the date the replacement dwelling is purchased or the new construction of the replacement dwelling is complete. Effective January 1, 2007, prospective relief is available to those who met all the requirements for a tax base transfer but failed to meet the 3-year filing deadline. You must re-file your claim to receive relief.
What kinds of property qualify for relief under this Section?
Property tax relief under this section includes, but is not limited to: single-family residences; cooperative housing corporation units or lots; community apartment projects; condominium projects; planned unit development projects; mobile homes; and owner’s living units that are a portion of a larger structure, all as prescribed in subdividsions (c)(1) and (2) of Section 69.5.
How many times can I make this claim?
This is one time only relief. Claimants are monitored by the State Board of Equalization in order to prevent multiple claims.
When do I have to purchase the replacement home? What about selling my original property?
The replacement dwelling must be purchased or newly constructed within two years of the sale of the original property. This provides for a four-year window; the original property may be sold before or after the replacement dwelling is purchased or newly constructed.
Are land and improvement values reallocated at the time relief is granted?
No. The land/improvement ratio is retained. The only exception to this is when a Prop 13 base value is transferred to a licensed mobile home. Since the mobile home is not assessed, we need to make some adjustment to the allocation so that an allocated improvement value does not cause a distortion in the assessment.
How will I know whether the sale of my original residence and the purchase of my replacement residence qualify? There seem to be so many technical elements involved, and I would not want to find out I was going to be reassessed when I had depended on Prop 60 relief.
It' s true that many of these transactions are quite complex. It is best to visit the Assessor s Office prior to the completion of all of your transactions. One of our staff will be more than happy to discuss your particular situation in detail.
Should you have any further questions please contact the County Assessor's Prop 60 facilitator at 454-2002.
Proposition 90:
This program allows seniors to transfer their current taxable value into other counties within the state even if they move from another non-qualifying county in California. The replacement residence must be of equal or lesser value than the original residence.Alameda, Los Angeles, Orange, San Diego, San Mateo, Santa Clara, and Ventura. [Contra Costa, Inyo, Kern, Riverside, Modoc, Monterey, and Marin have dropped out of the Prop 90 program.]
Before making any decision, be sure to consult with your CPA and the asessor the the county under consideration before making any move. Things change.
Proposition 58 (Santa Cruz County Government)
"Keeping it in the family" This information, produced by the Santa Cruz County Assessor explains how parents and their children may transfer property without being reappraised.What is Proposition 58?
Proposition 58 is a constitutional amendment approved by the voters of California on November 6, 1986, which excludes from reassessment transfers of certain real property between family members.
Which transfers of real property are excluded from reassessment by Proposition 58?
The following transfers of real property are affected by Proposition 58:
- Transfers of the primary residences between parents and children.
- Transfers of the first $1,000,000 of real property other than the primary residences between parents and children.
- Children is defined by any of the following:
- Any child born of the parent(s).
- Any stepchild or spouse of that stepchild while the relationship of stepparent and stepchild exists.
- Any son-in-law or daughter-in-law of the parent(s).
- Any adopted child who was adopted before the age of 18.
It is the Proposition 13 value (factored base-year value) just prior to the date of transfer. Basically this is the taxable value on the assessment roll.
Can transfers of real property to or from a family partnership be eligible for Proposition 58 exclusion?
No. Transfers of real property must be between eligible parents and children, not legal entities.
Can a transfer of real property between grandparent and grandchild qualify for this exclusion?
On March 26, 1996 a constitutional amendment was approved by the voters (Proposition 193). Under its provisions, a transfer from grandparent to grandchild is generally not eligible for the exclusion unless both parents of the grandchild are deceased. However, this does not apply in all cases. The parents’ marital status on the date of the transfer may be a factor in determining qualification for the exclusion.
What are the time filing requirements of Proposition 58?
- Within three years of the transfer.
- Prior to transferring to a third party.
- Within six months of the mailing of a notice of supplemental or escape assessment.
As often as you wish, provided that the taxable value being transferred does not exceed the first $1,000,000 from real property other than the primary residence.
What if the Assessor sends me a claim form and I do not file in a timely manner?
The County Assessor will consider non-compliance to filing as a potential change of ownership, which would trigger a reappraisal and a possible increase in one's property taxes.
What must I do if I think I am eligible?
You may pick up a Proposition 58 claim form at our office or we can send one to you. The Proposition 58 claim form is also available online at http://www.co.santa-cruz.ca.us/tax/taxforms.htm If you should have any questions concerning the completing of this form, please contact the County Assessor at (831) 454-2002.
Proposition 8 Reductions
"These Assessments Are Too High" This information, produced by the Santa Cruz County Assessor explains how to get a temporary reduction on property assessments that are above current market value.What is Proposition 8?
Prop 8 was one of the early amendments to Prop 13. Prop 13, as you may know, changed California's method of property taxation from a “market appraisal system” to an “event driven system”. Due to the pressures of ever increasing property values the taxpayers revolted. They amended the constitution to state that instead of constantly raising our assessments every 3 or 4 years, only reassessments at market value can occur when there is a change of ownership or new construction. Until one of these events occurs assessments may only increase by the consumer price index and this can be no more than 2%. As you can see, the impetus and the context of Prop 13 was a rising real estate market. It didn't take long for the question to arise: ‘If my values are "frozen", what happens when the market goes down? I'll be paying taxes on an assessment that is above the market....!' And so.......Prop 8 was born.
What does Prop 8 say?
Very simply, it added a few words to the California Revenue and Taxation Code which make reference to adjusting base year values to take "into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value". R & T Code Section 51(b)
Does the Assessor automatically lower values when they're above market?
The Assessor initiated reductions on single family residences in Santa Cruz County beginning in 1992. At that time it was clear that the real estate market was experiencing more than a temporary slump. Currently (1997) there are more than 8,000 properties that have been reduced. These reductions are based upon a detailed analysis of thousands of sales from 1988 to the current year.
Why wasn't my property reduced?
Santa Cruz County has a very complex and varied real estate market. From the mountains to the sea, there are few vast tracts of identical homes. This makes global reductions quite difficult.
What can I do if I think my assessment is too high?
The Assessor has a one page form which may be submitted as a "Request for Reappraisal". Any supporting data (appraisals, comparables, multiple listings, etc.) will be helpful in expediting your reduction if it is warranted.
I don't know anything about the market value of my property. Do I have to hire an appraiser or a real estate agent in order to pursue this reduction?
No. We have a very knowledgeable and experienced staff. Our appraisers are professionals who will be more than willing to discuss your assessment with you.
When must I file this request?
The state legislature has recently responded to a statewide decline in the real estate market. In the past there were strict time limits on when to file for a reduction, this often resulted in several months delay in the Assessor's ability to respond to the request. Now a request can be submitted at any time and the Assessor has the authority to reduce the current year's assessment.
What happens when the market begins to recover?
A reduction to the base year value under the auspices of Prop 8 is not permanent. The Assessor is required to track every reduction until the base year value is restored. The consumer price index continues to compound each year, so this tracking presents a formidable challenge to appraisal staff.
Where can I pick up a "Request for Reappraisal"?
Forms are available at the County Assessor's Office, 701 Ocean St Room 130. You may also call us at 454-2002 to request a form and it will be mailed to you.
Must I apply for this reduction every year?
No. The Assessor will review your assessment every year until the value is restored to its appropriate base year level. If you believe the value has declined again then you may submit another "Request for Reappraisal" to get further relief.
Should you have any further questions please contact the County Assessor at 454-2002.
The Disabled Veteran's Exemption (Santa Cruz County Government)
This pamphlet, produced by the Santa Cruz County Assessor explains how veterans may obtain property tax relief.What is the Disabled Veteran's Exemption?
The Veteran's Exemption is outlined in Section 205.5 of the California Revenue & Taxation Code. For qualifying veterans it exempts a portion of the assessed value of their personal residence from property tax.
How much does it exempt?
An exemption of up to one hundred thousand dollars ($100,000) is available to totally disabled (as rated by the Veteran’s Administration) veterans. This rises to one hundred and fifty thousand dollars ($150,000) if household income does not exceed forty six thousand three hundred two dollars ($46,302). The exemption is available on both regular assessments and supplemental assessments.
Who qualifies for this exemption?
Both veterans and spouses of veterans may qualify. Veteran as defined in Section 3 of Article XIII of the Constitution is quite broad. It includes all of the Services and there are even some peacetime veterans that would be included. The applicant qualifies if he/she:
- a. “is blind in both eyes, has lost the use of two or more limbs, or is totally disabled as a result of injury or disease incurred in military service” or.....
- b. has been rated as 100% disabled by the VA or disability compensation is at 100% by reason of being unable to secure or follow a substantially gainful occupation or.....
- c. is “the unmarried surviving spouse of a veteran; provided, that the deceased veteran during his or her lifetime qualified in all respects for the exemption or would have qualified for the exemption under the laws effective on January 1, 1977".
- d. is the unmarried surviving spouse of a veteran killed or missing in action.
What kinds of property are subject to the exemption?
The property must be a principal place of residence. The eligible owner must occupy the dwelling as of January 1 each year for which the exemption is granted.
What about my Homeowner's Exemption, is that still applicable if I qualify for the Disabled Veteran's Exemption?
No, this exemption is granted in lieu of any other real property exemption. In addition: “No other real property tax exemption may be granted to any other person with respect to the same residence for which an exemption has been granted under the provisions of this section...”
What kind of documentation do I need when I apply for this exemption?
You will need your discharge documents. In the case of a spouse applying for the exemption, the Veteran's Administration must first determine whether an injury or disease is service-connected. Also a death certificate (or facsimile is required). If you are claiming low-income status you should carefully read the Statements attached to the General Information sheet, which is provided by the County Assessor.
Where can I get a claim form?
Claim forms are available at the County Assessor's Office, 701 Ocean St, Room 130 in Santa Cruz. You may also call 454-2002 and request that a form be sent to you.
When should I file?
In order to receive the full exemption you must file by 5 p.m. on February 15. If you file between February 16 and December 10 you will receive 80% of the exemption. The full exemption (up to the amount of the supplemental assessment) is available if the filing is made by 5 p.m. on the 30th day following the Notice of Supplemental Assessment issued as a result of a change in ownership or completed new construction.
Must I file every year?
Once you qualify for the $100,000 exemption it remains in effect until terminated. You will be sent a notice on or after March 1 to ascertain whether or not you have retained your eligibility. An annual filing is required where the $150,000 exemption is claimed. Once terminated, a new claim form must be obtained from and filed with the Assessor to regain eligibility.
Santa Cruz County Government
Gary E. Hazelton, Assessor701 Ocean Street, Room 130
Santa Cruz, CA 95060
Office Hours: 8AM - 5 PM, Mon-Fri
General Information : 831-454-2002
Appraisal Division: 831-454-2270
Business Property Division: 831-454-2487
Marine/Aircraft Division: 831-454-2462
Fax: (831) 454-2495