Proposition 110 – Disabled Persons FAQ
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Proposition 110 Disabled Persons FAQ
Transfers are allowed within the same county (intracounty) and in select counties, transfers are allowed from one county to another county (intercounty). In addition, the initiative provides relief for modifications that make a home more accessible for a severely disabled person (section 74.3).
If you or your spouse that lives with you is severely and permanently disabled, you can buy a home of equal or lesser value than your existing home and transfer the factored base year value of your existing home to your new property.
Also, you can modify your current home as long as the modifications directly satisfy disability requirements without the modifications being assessed as new construction. Once you have filed and received this tax relief, neither you nor your spouse who resides with you will qualify to receive this benefit again.
The replacement property must be of equal or lesser value than the original property. The “equal or lesser” test is applied to the entire replacement property, even though the owner of the original property may acquire only a partial interest in the replacement property. Owners of two qualifying original residences may not combine the values of those properties in order to qualify for a Proposition 110 base-year transfer to a replacement property of greater value than the more valuable of the two original residences.
The replacement property must be purchased or built within two years (before or after) of the sale of the original property. To receive retroactive relief from the date of transfer, you must file your claim within three years following the purchase or completion of new construction of the replacement property. The disabled person, spouse or legal guardian must submit a Physician’s Certificate of Disability (Form BOE-62A) with the claim.
The original property must be subject to reappraisal at its current fair market value unless the buyer(s) also qualify the property as a replacement property for a base year value transfer due to intracounty/ intercounty disaster relief or a base year value transfer for persons aged 55 or over. Therefore, most transfers between parents and children will not qualify.
When making the equal or lesser value comparison, is a simple comparison of the sales price of the original property and the purchase price of the replacement dwelling all that is needed?
I am a qualified disabled person and my doctor says I should move to a different climate for better comfort. I want to relocate from Los Angeles County to Monterey County, but Monterey County says they don't allow base year value transfers from another county. I thought there was a law that allows that.
The law that allows for transfers of base year value between counties merely allows each county board of supervisors to adopt an ordinance accepting transfers from other counties. It is the discretion of each county to allow such transfers. The county in which your replacement property is located must have an ordinance that accepts intercounty transfers.
As of September 19, 2013, the following nine counties in California have an ordinance enabling the intercounty base year value transfer:
|El Dorado||Riverside||Santa Clara|
|Los Angeles||San Diego||Ventura|
Since the counties indicated above are subject to change, we recommend contacting the county to which you wish to move to verify Proposition 110 eligibility.
1) at the time of its sale or
2) within two years of the purchase or new construction of the replacement
If you did not have the homeowners’ exemption on your property, you may need to provide documents to the assessor that prove it was your principal place of residence. Proof of residency may include voter or vehicle registration, bank accounts, or income tax records.
If I receive the benefit of Prop 60/90/110, may I still qualify and claim a Homeowner’s or Disabled Veteran’s Exemption?
Specifically, the following percentages apply:
• 100% of the market value of an original property if a replacement home is purchased before the original property is sold.
• 105% of the market value of an original property if a replacement home is
purchased within one year after the sale of the original property.
• 110% of the market value of an original property if a replacement home is purchased within the second year after
the sale of the original property.
The value can often be substantially higher than the actual cost of construction especially if the work is completed by the homeowners and not by an outside general contractor.
Is the “equal or lesser value” test a simple comparison of the sales price of the original property and the purchase price or cost of new construction of the replacement home?
No. The comparison must be made using the full market value of the original property and the full market value of the replacement home as of its date of purchase. This is important because the sales price is not always the same as market value. The assessor must determine the market value for each property, which may differ from the actual sales price.
If I buy a replacement home with a much higher value than my present home, can I qualify for a partial exclusion?
If I give my original property to my child, can I still qualify for a Prop. 60/90/110 when I purchase a replacement property?
Can two otherwise qualified property owners who have recently sold their separately owned original properties combine their claim when they buy a single replacement home together?
If an addition is made to a replacement home (such as a new room, detached garage, or pool) after the base year has been transferred, can that addition be excluded from re-assessment?
• The new construction is completed within two years of the date of sale of the original property;
• The owner notifies the assessor of the new construction in writing no later than
30 days after its completion; and
• The market value of the new construction plus the market value of the replacement home is not greater than the market value of the original property.
What if my original property contains more than just my principal residence and the land necessary for that residence?
Example: You sell your original residence on a 5-acre parcel and purchase a .25 – acre residence. As long as the 5-acre parcel was used only for purposes incidental to the use as a residential site, the base year value of the original property could be transferred assuming all the other qualifications are met.
Do I still have to pay the existing, current tax bill on the replacement property or will that bill be adjusted to reflect the new value?