Proposition 5 and Taxes Affect Me How?

Whether or not you are a homeowner, get familiarized with California’s Proposition 5 regarding property taxes.  In one form or another, this measure will affect you or your family members.  As usual, during the elections, you will be hearing about the pros and cons from interested parties as to how they recommend you place your ballot vote.

In a nutshell, as per California Association of Realtors (C.A.R.): A YES vote on Proposition 5 “will allow seniors (55+), the disabled, and victims of natural disasters to move to a home suited to their needs without facing drastically higher property taxes”. 

In more detail, this proposed Proposition 5 has to do with the transfer of taxes when seniors have to downsize, move, and sell their property.  When seniors face these life situations, they do not want to be penalized as a result of having to make such moves. Due to health needs or personal desires, seniors are having to move closer to their children who may reside in other counties within the state. Currently, if the senior wants to or has to move to another county, there is difficulty finding another county that does accept the transfer tax base rate. It is therefore difficult to make moves because of the high cost of the new tax rate that exists because only about 8 out of the 58 counties in the state accept a transfer of the tax base of the seller’s previous home.  The ability of a homeowner needing to make this kind of move is restricted, and the move is financially “penalized”. 

Proposition 5 expands the benefits of transferring tax base within the State of California.  According to C.A.R., this would provide appropriate relief by allowing those eligible the ability to transfer their current property tax base to the purchase of another home in any of California’s 58 counties.  C.A.R.  believes that this would help boost the housing inventory, facilitating more transactions throughout all counties in the State of California.

As always, before you make your next move, should you sell your home, consult with your tax/certified public accountant as to how current legislation would affect you and your property taxes.  Also, you may find more detailed information from legislative analytical agencies on the internet on the topic of Proposition 5.

This article was written by Nef Cortez who is a licensed Real Estate Broker, Ca BRE # 00560181, licensed since 1976. He can be reached for more information via e-mail at nefcortez@gmail.com, or website www.nefcortez.com. Please feel free to email any questions regarding real estate.