Plans to transfer your property tax

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Hopefully by now you’re aware of the historic effort C.A.R. is spearheading to qualify a ballot initiative for the November 2018 ballot. Known as the Property Tax Fairness Initiative, this measure would allow homeowners 55 years of age or older to transfer their Prop. 13 tax base to a home of any price, anywhere in the state, any number of times, These protections also would be extended to people who are disabled and those who have lost their homes to a natural disaster. It’s a carefully written initiative that includes appropriate safeguards while eliminating California’s property tax “moving penalty.”

In order to qualify the initiative for the ballot, C.A.R. must collect approximately one million signatures from California registered voters. Petitions were mailed to each C.A.R. member in early January, urging them to sign the petition and to obtain four additional signatures of registered voters within the same county, and mail it back to C.A.R.

People are responding enthusiastically to the measure, but C.A.R. also has received a fair number of questions regarding this initiative and how it works, especially in relation to Props. 13, 60, and 90.

We hope this short Q&A will help answer those questions.

Why is the Property Tax Fairness Initiative Needed?
It’s no secret that California is in the midst of a housing crisis. Not only is affordability near an all-time low, but housing inventory remains stubbornly low – wreaking havoc on the market and reducing homeownership opportunities for many would-be buyers in California.

On top of these challenges, nearly three-quarters of homeowners 55 years of age or older have not moved since 2000, furthering constricting inventory. Research has indicated that one of the primary reasons these homeowners are effectively “locked” into their homes is the prospect of paying higher property taxes.

C.A.R.’s Property Tax Fairness Initiative will help these homeowners sell their current homes and move without being subjected to what is effectively a massive “moving penalty.” These homes will then be available for families and other would-be buyers to purchase.

How Do Property Tax Assessments Currently Work?
The amount a homeowner pays in property taxes is based on the assessed value of the home at the time of purchase. Generally, Prop. 13 limits property taxes to 1 percent of the assessed value at the time of purchase, even if the value of the property subsequently increases.

What is Prop. 13?
Prop. 13 is a California proposition that limits the property tax rate to 1 percent for all California property and annual tax increases to no more than 2 percent. This protects homeowners from losing their homes due to unforeseen property tax increases.

There also are two other propositions that affect property taxes – Prop. 60 and Prop. 90.

What is Prop. 60?
Prop. 60 allows senior homeowners, 55 years of age or older, to transfer their property tax baseone time -- to another home in the same county, as long as the purchase price of the replacement home is equal to, or less than, the sale price of the original residence.

What is Prop. 90?
Prop. 90 is an extension of the original Prop. 60 program. Prop. 90 allows senior homeowners to transfer their property tax base, one time, to a home in a different county, as long as the county accepts such transfers.

 Prop. 60Prop. 90C.A.R. Property Tax
Fairness Initiative

Transfer Tax BaseOne timeOne timeUnlimited

Counties AllowedSame countyDifferent county
(if new county
accepts transfer)Anywhere in the state

PriceReplacement home equal to,or less than, the price of the property soldReplacement home equal to,or less than, the price of the property soldAny price


For more information about C.A.R.’s Property Tax Fairness Initiative, visit on.car.org/portability2018 or send us an email at portability@car.org.


 

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EXECUTIVE OFFICES:
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phone (213) 739-8200; fax (213) 480-7724

LEGISLATIVE OFFICES:
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phone (916) 492-5200; fax (916) 444-2033 

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