California seniors in line for property tax relief

November election promises property tax relief for California seniors

A ballot initiative for the November election, The California Proposition 13 Tax Transfer Initiative, would amend Prop 13 to allow senior homeowners or severely disabled homebuyers to transfer their property tax base to a replacement residence for any price, in any County and as many times as they wish.

Related: Buying a home with The New Reverse Mortgage

How will the Proposition 13 Tax Transfer initiative work?

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When Prop 13 was passed 40 years ago one of the main goals of the legislation’s authors, Howard Jarvis and Paul Gann, was to decrease and stabilize property taxes for seniors living on fixed incomes. There’s no question that senior homeowners benefited from Prop 13. But, and you can file this under “unforeseen circumstances” it has slowed down the real estate market.

Related: Love your home but it doesn’t love you anymore?

The lasting effect of Prop 13

The lasting effect has been that senior homeowners are less likely to move from their current residence, which is a contributing factor to the current housing shortage we’re experiencing.

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The state’s aging population and rising real estate prices have contributed to the decline in property turnover.

To support Prop 13 the legislature had to look to other sources and to make up the shortage in property tax revenues the state has had to rely on income, sales and other tax increases to fill its coffers. So while our property tax rates are among the lowest in the nation, the same cannot be said for state income and sales tax rates.

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How will California senior homeowners benefit from the Prop 13 Transfer Tax initiative?

When Prop 13 passed in 1978, senior homeowners were able to maintain their 1975 tax basis. As a result countless seniors have remained in their homes, even though it needed repairs they couldn’t afford or as they aged they could no longer manage a larger home.

With the passing of the Prop 13 Transfer Tax initiative a world of options will open up to them. Whether it’s downsizing or right sizing having a lower tax rate will certainly enable seniors to move to homes that better fit their retirement needs with property taxes they can afford.

Related: The best time to plan your retirement is before the boss does

A call to action for California senior homeowners

At this stage the Proposition 13 Transfer Tax initiative must still be passed by California voters on November 6.

If past elections have taught us anything it’s that “it ain’t over ’til it’s over”.

The original Prop 13 passed by a margin of  62% to 34% but the voter turnout was only 23.4%. Without a strong turnout there’s always the possibility that senior homeowners will miss this opportunity.

Campaign advertising can be politics at its worse, so it’s up to us to get out, set the record straight, vote and encourage others to do the same.

Related: The New Reverse Mortgage help senior homeowners right size their retirement.

The New Reverse Mortgage isn’t for everyone…but it could be!

If you’re still wondering if a Reverse Mortgage is the right solution for you but you’re not ready to sit down with one of our Reverse Mortgage Experts, then we’ll be happy to mail (or email) you Use Your Home to Stay at Home which is the official federally approved consumer booklet for those considering a reverse mortgage.

Some of this information courtesy of Pressreader.com