It is no secret that modern science and technology is allowing people to live longer and healthier lives. In fact, as of 2014, life expectancy in the United States reached 75 years for men and 80 years for women. As a result, people are living healthy and full lives after the age of 55 and well into their retirement. At Distinct Law Group, we have been fortunate enough to receive an influx of clients over the age of 55 that are looking for the best ways to maximize their income and live comfortably throughout retirement. Depending on each individual case, Distinct Law Group has been successful in advising our clients on the benefits of wealth management, savings and asset protection strategies.
Everyone is different and every situation is unique. Some are merely looking for effective and efficient ways of maximizing their retirement income. Others are looking to down size after their children have moved on and started their own families. Some are looking to purchase larger homes to accommodate their growing families. Whatever the situation may be, Distinct Law Group has a plan for you to help you reduce taxes.
As part of our on going desire to provide people with legal knowledge, here, we analyze the ability of homeowners who are over the age of 55 utilizing the tax benefits found in Propositions 60 and 90.
Under certain criteria and requirements, Propositions 60 and 90 allow homeowners that are over the age of 55 to transfer their tax base rate from one property to another at the time that they sell a principle residence. In most cases, we are finding that this leads to substantial savings in taxes and allows the 55 and older community to put those savings towards other things like travel, dining and entertainment.
REQUIREMENTS FOR UTILIZING PROPOSITIONS 60 AND/OR 90
- The original property MUST have fallen under the eligibility requirements of either the Homeowners or Disabled Veterans Exemption. The eligibility under these exemptions would have had to come at the date of sale of the original property or within 2 years of the purchase of the replacement property.
- Either you or a spouse living with you MUST have been 55 years of age (or older) at the time that the original property was sold.
- The property referred to as the “replacement” property MUST be established as your principle residence and meet the eligibility requirements of the Homeowners or Disabled Veterans Exemption.
- The replacement property MUST have been purchased or built within 2 years of the sale of the original property. This can be 2 years before or after the sale of the original property.
- The replacement property MUST be of equal or lesser value than the original property. When referencing “value”, the assessment is based on “current market value,” which can be assessed by a real estate appraisal and market analysis.
DIFFERENCE BETWEEN PROPOSITIONS 60 AND 90
The difference between Propositions 60 and 90 is that Proposition 60 can only be utilized if the transfer from one property to another occurs within the same county. Under Proposition 90, there is what is known as inter county transfers, which allows the transfer of the base tax rate between different counties in California.
Propositions 60 and 90 are just two of several ways you can reduce taxes, save money and maximize your resources.
If you have any questions about the eligibility requirements under Propositions 60 and 90, or would like to discuss other ways to protect your money, and reduce taxes, contact Distinct Law Group for a FREE consultation.