If you’re a homeowner over age 55 who would love to move, but worry about your property taxes going up, you may be in luck. A November ballot initiative aims to eliminate the so-called “moving penalty” for seniors who sell their homes.

 

The Property Tax Fairness Initiative (Prop. 5) would allow seniors to carry their current property tax assessment level to another home of any price, anywhere in the state, any number of times.

 

Many seniors are currently living in homes they now feel are too big or too far from their families. However, if they move, they could face property tax increases of 100 percent, 200 percent, or even 300 percent. This is because Proposition 13 kept these taxes low – but only if a homeowner lived in the same house.

 

Two subsequent propositions – 60 and 90 – made it possible for California homeowners 55 and older to keep the low property taxes on a one-time basis when moving to a home of equal or lower price within the same county. There are exceptions, but only 11 of California’s 58 counties allow sellers to switch counties and do so. This initiative would change that.

 

Seventy-one percent of homeowners 55 years of age or older have not moved since 2000, according to Alex Creel, a lobbyist for the California Association of Realtors. This further constricts the scant number of houses available for purchase in the East Bay and the state, according to Creel, whose organization got the initiative, also known as Proposition 5, on the ballot.

 

Almost 43,000 additional transactions could occur annually if Prop. 5 passes, according to California’s Legislative Analyst’s Office. Opponents say the proposition could cause income to state and local governments to drop, but Creel believes the number of buyers paying taxes on the properties’ full value would help make up for it.

 

Prop. 5 is up for a vote on the November ballot. In the meantime, we can help acquaint you with the existing options. Give us a call.