Proposition 5


You can download the presentation by clicking here.

 

How Does Prop 5 Work?

We recently had the pleasure of presenting Prop 5, The Senior Property Tax Transfer Initiative to fellow Orange County professionals at the Yorba Linda Chamber of Commerce Luncheon who were curious about Prop 5. At this presentation, we were able to explain how Prop 5 works!

There are essentially 5 main feature of Prop 5, which are summarized as follows:

  1. Prop 5 would allow Seniors 55+, as well as Severely Disabled Veterans and victims of natural disasters, to transfer their property tax an unlimited number of times. Currently Prop 60 only allows Seniors to transfer their property tax basis (Prop 13) one time. A 2nd move after the age of 55, will trigger a full reassessment, regardless of other circumstances. Prop 5 would change this.
  2. Prop 5 would allow Seniors 55+, as well as Severely Disabled Veterans and victims of natural disasters, to transfer their property tax anywhere in the State of California, regardless of county or location. Currently Prop 60 restricts Seniors from transferring their property tax out of Orange County, or wherever the Senior’s home county is. Prop 90 allows a transfer out of Orange County or the home county, but only to a limited number of counties that opt in. Currently only 11 of 58 counties in California are eligible. Prop 5 would make all 58 counties eligible.
  3. Prop 5 would allow Seniors 55+, as well as Severely Disabled Veterans and victims of natural disasters, to transfer their property tax when “buying up”. Currently, Prop 60 only allows Seniors to transfer their property tax if they purchase a home that is the same or lesser value. If a Senior buys a home for just $1 more they loose their Prop 13 benefit. Prop 5 would change this buy allowing a Senior to buy a more expensive home, transfer their Prop 13 and simply add the difference in value.
  4. Prop 5 would allow Seniors 55+, as well as Severely Disabled Veterans and victims of natural disasters, to transfer their property tax at a proportional rate when “buying down”. Prop 60 only allows Seniors to transfer their same tax amount, even if the new home is significantly less. Prop 5 would re-assess a Senior’s property tax at the same ratio on the new home as it was set on the original home.
  5. Prop 5 would eliminate the re-assessment exemption for parent-to-child transfers. Currently Prop 60 allows a direct family member to inherit the Prop 13 tax basis of a Senior. Prop 5 intends to get to the spirit of Prop 60 which is to allow Seniors greater flexibility in transferring their own tax basis while removing a tax benefit from other family members who are not necessarily seniors.

If you would like any more information on Prop 5 in Orange County, or anywhere in California, please take a look at our short presentation in the video.  And if you have any questions on how Prop 5 might affect you & your home, please contact us here.