Let’s say you bought your house in the good old days and paid $150K for it. Now it is worth a lot more–even in this recession, but it is too old, too big, too far away from the grandkids, etc… and you would sell, but don’t like the idea of a big tax bill.
What if you could go ahead and sell your old house, buy another more suited to you now, and still have a property tax bill based on $150K?! That is where Proposition 60 comes in. Its glamor name is Replacement Residence Exclusion.
Of course, there are stipulations, and you can read all about it and how it works and FAQs on the Sonoma County Assessor’s website, but here it is in a nutshell…
- You or your spouse are at least 55 yrs old.
- Both the old house & the new one are in Sonoma County.
- The replacement house is of equal or lesser market value.
- You’ve lived in your old house at least 2 years as your primary dwelling.
So, now you can go buy a new house for $450K and still pay a tax bill based on $150K. Too good to be true? No, not it this case!
One piece of advice: It is always a good idea to consult your tax advisor when buying or selling real estate.