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Property Taxes
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Proposition 13
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Local governments depend upon property tax receipts to provide services and programs for area residents. Property taxes are
also the levy most taxpayers love to hate the most, even though federal income taxes usually take a larger percentage of
household income.
Ordinarily, when the ownership of California real property changes, the property is reassessed at its current fair market
value and the new owner pays property tax based on the reassessed value. However, the law provides certain exemptions from
reassessment and, in certain instances, allows a taxpayer to transfer the base-year value of the property to a subsequent
property without being reassessed. As a result of Proposition 13, a taxpayer’s base-year value could be much lower than
if based on the fair market value of the property.
This memorandum summarizes some of the basic exemptions from property tax reassessment. The relevant California code sections
are Revenue and Taxation Code Sections 63.1 (dealing with transfers between parents and children, as well as grandparents and
grandchildren), 62 (dealing with transfers into revocable trusts), 63 (dealing with interspousal transfers), 69.5 (dealing with
transfers by persons over 55 years of age or severely and permanently disabled persons).
In addition, property which has had major renovations is normally subject to property tax reassessment. However, California law exempts
certain property improvements from reassessment. More specifically, this memorandum discusses Revenue and Taxation Code Sections 74.3
and 74.6 (dealing with improvements for disabled access), and 74.5 (dealing with seismic retrofitting improvements).
Readers should consult their own professional tax advisors when faced with situations not discussed in this memorandum. This
memorandum is general in nature and slightly different facts may produce different results.
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Proposition 90
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Ordinarily under Proposition 13, the value of a home for property tax purposes is re-assessed to market level whenever a
change in ownership takes place. This usually results in higher property taxes for the homebuyer.
In November 1988, the state's voters approved Proposition 90, which is designed to induce greater turnover of homes owned
by senior citizens. The measure provides anyone over the age of 55 with relief from Proposition 13 by allowing them to move
from one county to another without undergoing a change in their basic property taxes.
Proposition 90 is a "local-option" law; each county has the option of participating. If a county has adopted a Proposition
90 ordinance, it accepts transfers of property tax base assessments from other California counties. If the county that the
homeowner is moving from does not have a Proposition 90 ordinance, this does not affect the eligibility of the homeowner.
Homeowners seeking to transfer their property tax base assessment must verify that the county to which they are moving has
a Proposition 90 ordinance.
[Please note: Proposition 60 is a similar law passed by the state's voters two years prior to Proposition 90.
It allows seniors to keep their property tax base assessment when they move within the same county.
Proposition 60 does not require passage by a local municipality. It is state law.]
Click here for a list of all the California county property tax assessors' offices
www.boe.ca.gov/proptaxes/assessors.htm
Counties which have adopted a Proposition 90 ordinance:
| Alameda |
Orange |
San Mateo |
| Los Angeles |
San Diego |
Santa Clara |
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Ventura |
Counties which have rejected implementing Proposition 90:
| Butte |
Merced |
San Luis Obispo |
| Calaveras |
Modoc* |
Santa Barbara |
| Contra Costa* |
Mono |
Santa Cruz |
| El Dorado |
Monterey* |
Shasta |
| Fresno |
Napa |
Siskiyou |
| Inyo* |
Nevada |
Solano |
| Kern* |
Placer |
Sonoma |
| Lake |
Riverside* |
Stanislaus |
| Madera |
Sacramento |
Trinity |
| Marin* |
San Benito |
Tulare |
| Mendocino |
San Bernardino |
Yolo |
[Counties with an asterisk * previously had a Proposition 90 ordinance then repealed it. All other counties listed in
Table II never had a Proposition 90 ordinance.]
Get Involved now by contacting PWR if you live in a county that does not have a Proposition 90 ordinance.
If you want to lobby your county board of supervisors to adopt a Proposition 90 ordinance, or extend an existing one,
please contact C.A.R.'s public policy division at 213.739.8273 for more information.
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