Articles Tagged with real property

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money signI was recently at a friend’s house, and, accidentally made someone’s day. This is not a usual occurrence for me, but I did enjoy it.  Here’s what happened: a woman that I didn’t know told me that she had inherited her parents’ house in Berkeley. Because she had inherited it from her parents, she also was able to keep their very low property tax rate. Her problem was that she thought that she’d like to sell that house and buy a new one, but was worried that her property tax rate would skyrocket as a result.

Here’s what she didn’t know: if she waits until next year, when she turns 55, and purchases a new home that’s worth the same or less than the residence that she is selling, and buys the new house within two years of selling the old one, she can keep her old property tax base for the new house. She has to sell her old house to a new owner so that the new home can be reassessed for property tax purposes and she has to file a claim for exclusion from reassessment on the new property within three years of the purchase. In tax language, this is called “transfer of base year value,” which is the value that the county assessors use to calculate the property tax owed each year.

This is a one-time exclusion from reassessment for those over 55. So, the next time she sells her home and buys a new one, her property taxes will go up. Proposition 60, passed in 1986, established this exception for intra-county transfers–that’s Latin for WITHIN a county. So, if my new acquaintance stays in Alameda county, and otherwise follows these rules, she won’t be reassessed.