In February of 2010, I was anxiously waiting with some clients from Sunnyvale on their home purchase until our county supervisors could approve the adoption of Proposition 90 in El Dorado County. Luckily it passed that month and will save my clients several thousand dollars each year they own their home. Here is some information on Proposition 90. Keep in mind that at the time it was adopted, it was for a 5 year period which would have it expiring in February 2015. At that time, our county supervisors will have to approve to extend it. (Update- On January 27, 2015 the El Dorado County Board of Supervisors voted to extend Proposition 90 transfers until October 1, 2016.) Those homeowners who have it in place on their homes will continue to keep the bennefit, even if it is not extended. *Notice that El Dorado County is currently the only county in the Sacramento region that has approved Proposition 90.
Here's an example where this works really well:
You purchased your home in San Jose back in 1970 for $100K. Because of Proposition 13 your taxes are very low and are based on your $100,000 purchase price. Now your home there is worth $900,000. You come up here to visit your family and find a house in El Dorado Hills that you absolutely love for $890,000. Normally your taxes on a purchase would be based on the purchase price, and taxes on your new home in El Dorado Hills would be roughly 1.25% per year or around $11,125 for a home $890,000. With Proposition 90 though, you can transfter that low tax base value you have on your San Jose home and pay taxes on that instead. Of course, you don't have to spend $900,000 to get the tax savings. See below.
*One of the property owners must be 55 years old.
*The replacement residence is purchased or newly constructed within two years of (before or after) the sale of the original property.
*The market value of the replacement principal residence must be of equal or lesser value as compared to the original property. This means that the full cash value of the replacement residence on the date of purchase or completion of new construction must not exceed:
- 100 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed prior to the date of sale of the original property, or
- 105 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed within the first year following the date of the sale of the original property, or
- 110 percent of the full cash value of the original property as of the date of sale, if the replacement dwelling is purchased or newly constructed within the second year following the date of the sale of the original property.
If you have other questions on Proposition 90 call our El Dorado County Assessor -Karl Weiland at (530)-621-5757. If you are planning a move to El Dorado Hills or the western part of El Dorado County call me!
* Updated May3, 2015.
DeeDee Riley - El Dorado Hills Realtor - Lyon Real Estate - CABRE#01499004
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