As many of us start to approach “maturity” there are benefits we should be considering, and it’s not just the Denny’s Senior Discount Menu (although I am actually looking forward to that). For some reason, “getting older” is getting younger all the time. What does this ambiguous statement mean? It used to be widely acknowledged that being a “Senior” meant you were at least 65 years old (or maybe in your 60’s). Today, however, AARP is sending out membership applications to people in their 40’s (just ask Kris).
The aforementioned Denny’s “Senior” Discount Menu is now available to those reaching the ripe old age of 55. But there is another benefit, a potentially sizable benefit, available to those of us at, or in my case approaching, 55 years on this planet. It’s called California Prop 60/90, aka Property Tax Exemption and Exclusion Relief. In a nutshell, it provides a one-time property tax relief by preventing a property valuation increase when a qualified person (55 years or older) sells their primary home and purchases another of equal or lesser value.
Translated: If your current home has a low property tax basis (likely because you have lived there for a while) you may transfer it to your next primary home. This is a potentially huge economic benefit due to the significant appreciation of home values over the past several years. Example: Your current home has a Property Tax bill of $4000 per year and is currently worth $900,000. But now the kids have grown up and are off to college or on their own, and you don’t need all that space. You decide to downsize and recoup some of the equity that has built up in your current home. You sell your home and buy another for $700,000. Absent Prop. 60/90 your property tax on the purchased home would be $7,700 (assumimg 1.1% of the purchase price for the purpose of this example). But under Prop 60/90, you would be able to transfer your previous property tax of $4,000 to your next home for an annual savings of $3,700. That’s not pocket change, especially if you want to retire some day. Even better than Denny’s Senior Discount Menu!!
Again, this is only a one-time benefit and applies to only certain Counties in California (San Diego is one of them). As with all government programs, there are other restrictions and important details you should aware of prior to making your decision to use this benefit. For more information, visit http://www.boe.ca.gov/proptaxes/faqs/reappraisal.htm or any of the many other websites that address frequently asked questions on this issue.
If you have already taken advantage of this great benefit, feel free to comment on your experience. We would love to hear from you. See you at Denny’s!