Solano Real Estate Scene: Proposition 5: Amend or not?
The Property Tax Transfer Initiative is on the ballot coming up in November. A yes vote amends the 1978 Proposition 13 and a no vote leaves it as is.
Proposition 5 will benefit severely disabled and homebuyers over 55. If it passes, it will allow homebuyers who are 55 or older or severely disabled to transfer the tax assessed value from their prior home to their new home, no matter the new home’s market value, the new home’s location in the state or the number of moves.
As of today, homebuyers over 55 can transfer their tax assessment from their prior home to their new home if the new home price is equal or lower in value in Solano County. This has been a godsend for many seniors that need to move out of their two-story, high-maintenance home into a smaller and easier-to-maintain one-story house.
A great example of this is one of my clients sold their Vacaville home in 2016 in Crestview that they lived in for 41 years and moved down to a less expensive, one-story home in Vacaville. The cost of the new home was $400,000 after he sold his old home for $500,000. Their property taxes on the new home ended up being only $1,200 per year after they applied for the Solano County “over 55 exemption.” The property taxes would have been $4,600 per year without this benefit.
You can find out about how this works on the Solano County Tax Assessors website. You can also call them at 784-6200 if you are not a computer person or even call a local lender or Realtor for help.
Proposition 5 enhances this program by allowing people to move to any county in California. Today, there are only a few counties that allow transfers from other counties and we are not one of them.
The other thing Proposition 5 will allow is for a move up to a higher priced home and get a partial break on the property tax. For example, a senior sells his or her two-story home in Laurel Creek for $500,000 and moves to a one-story in Rancho Solano for $650,000. The senior will pay full property tax on the $150,000 increase but maintain their old lower assessed taxes on $500,000 of the $650,000.
Another good example might be a senior couple that lives in Fresno but wants to move to Vacaville to be closer to their grown children and grandchildren. It’s tough enough to move to a higher priced area but to triple your property taxes, in some cases, makes it impossible.
Some opponents say that this sounds like a tax break for the wealthy but over the past 30 years I can assure all my readers and friends it has primarily helped the middle class and even some seniors that are poor with nothing more than the house they have owned for 30 to even 50 years. The wealthy don’t need this program, the middle class needs it!
Many of these seniors, including widows and widowers, have already paid more than their fair share of taxes over their 30 to 40 years working hard to own a home and achieve the American Dream.
I am voting yes even though my favorite people in the whole world are teachers and their union opposes Proposition 5. They are concerned that this will cause cuts to education but don’t get me started on this subject because I believe our biggest asset in California is our children and education and the people who teach them should be our highest priority because our children are the ones that will need to solve the problems we are leaving them with, namely the national debt of $20-plus trillion.