If either spouse is over age 55 (when the old home is sold), PROP 60 allows replacement of a primary residence with a new home of equal or lesser value (but see below) within the same county and transfer of the Prop 13 assessed valuation from the old home to the new property.  This is allowed once in your lifetime, and a spouse who has done it before ‘taints’ both spouses.

PROP 90 allows counties to elect to accept transfers of Prop 13 values for moves from other counties when a primary residence is replaced with a less expensive (but see below) home. If you are over 55 and move into a county which accepts Prop 90, you may take your old, lower Prop 13 value, regardless of from which county you move.

Using Prop 90, you can sell your $400,000 San Francisco home [assessed value $80,000] and move to a new $300,000 home in El Dorado County; the new home assessed value will be $80,000!

8 COUNTIES WHICH ACCEPT PROP 90 are El Dorado, Alameda,  Los Angeles, Orange, San Diego, San Mateo, Santa Clara, and Ventura.

Sacramento County’s tax roll dropped nearly 2.2 percent to $128.8 billion. Yolo County’s is down about 1.9 percent. And El Dorado County and Placer County both saw the value of their taxable property drop more than 6 percent. The falling values represent good news for many homeowners, who will see lower property tax bills this October.

However, the second straight year of shrinking tax rolls is another blow to local governments that rely on property tax revenue to fund programs and services. 

“It’s a significant hit,” said Mike Applegarth, a principal analyst in El Dorado County. “It translates into people (losing their jobs). It takes people to deliver services.” 

Last year marked the first time most counties saw property tax rolls drop since voters approved Proposition 13 in 1978. That’s because the market value of many properties dropped below the assessed value. In such cases Proposition 8 – a tax measure passed as a companion to Proposition 13 – requires assessors to temporarily lower the taxable value of properties until the market value climbs again. 

Market values have continued to plummet, and as a result, most county assessors have continued to lower the taxable value of properties in their region. Sacramento County Assessor Ken Stieger’s office just lowered the assessed value of another 38,000 properties. In all, owners of nearly 154,000 Sacramento County properties are paying less in taxes because the market value is below the previous assessed value. 

This year, there is a second factor at work as well. Under state law, counties are allowed to raise property taxes by up to 2 percent a year as long as the overall cost of goods and services is rising – in other words, during periods of inflation. In a time of deflation – when the costs of goods and services are falling – they are required to lower property taxes. 

For the first time since 1978, that scenario is playing out. So even homeowners whose property is still worth more than when they bought it will see a quarter percent decrease from last year in its assessed value. That should amount to $2.60 less in taxes per $100,000 of assessed value, according to the State Board of Equalization. 

“It’s the first time ever since Proposition 13 and probably the last time in our lifetime,” Stieger said.

Article provided by Ken Calhoon, Broker in Placerville, California.