Death and Taxes. Everyone’s heard those words. They’re part of a quote that originated with Benjamin Franklin: “Our new Constitution is now established and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”
Here we are more than 240 years after Ben made his pithy observation. A lot has changed since then but as of today’s Good Times, death is still at the top of the short list of inevitable facts we all have to face. (Until Google achieves The Singularity and starts transforming brain waves into algorithms uploaded into the cloud so we can live forever.)
Meantime, we lesser mortals at Real Estate of Mind are working on that other most inevitable thing – taxes. More specifically real estate taxes. Something so many people around the age of 55 are thinking hard about as they head into the last third of their lives wrestling with questions about downsizing, cash flow and leaving legacies for their kids.
Here’s a quick cheat sheet (reference guide, not an actual suggestion for cheating on your taxes,) for those trying to figure out how to avoid substantial increases in their property taxes if they sell their house and buy another one somewhere else in California. The good news? California seems to be dedicated to the “proposition” that all people should try to avoid more taxes when possible. Here are some of those propositions:
Prop 13 (1978): The original granddaddy proposition reducing existing property taxes and significantly limiting increases in the future.
Prop 58 (1986): Allows parents to pass homes on to their children without a reassessment of property taxes. (See the fine print folks.)
Prop 60 (1986): Offers homeowners the opportunity to sell and buy a new home (of lesser value) in the same County, while transferring a lower property tax base. (Not to be confused with the other, more recent Prop 60 having to do with condom use in the porn industry!!!)
Prop 90 (1989): Allows homeowners to transfer their existing property tax base to other participating counties in California. Only 11 counties currently qualify. (Call or email for the list.)
Prop 110 (1990): Extended Prop 60 to disabled homeowners of any age.
Prop 193 (1996): Extension of Prop 58 allowing Grandparents to transfer property to Grandchildren (provided their children are deceased) without reassessment of property taxes.
In the meantime, while continuing our quest to cheat both death (via google) and taxes (via proposition) I invite any and all of you who are wrestling with the numbers to give me a call to discuss how these Propositions can assist in your planning.