Baby Boomer Tax Break
Filed Under categories: Buying, Finance, News You Can Use, Real Estate News, Selling, Taxes
posted by Raye on July 3rd, 2007
Have you heard about Revenue and Taxation Code section 69.5? Well, if you are at least 55 years of age living in a property eligible for this Homeowner’s Exemption or receiving the Disabled Veterans’ Exemption, you are going to want to read on. (You’ll thank me later) Basically, this law allows you to transfer your tax basis on your current residence to a replacement dwelling of equal or lesser value within the same county. This exemption can only be taken one time.
In general, equal or lesser value means that the fair market value of a replacement property on the date of purchase or completion of construction does not exceed 100 percent of market value of the original property as of its date of sale if a replacement dwelling is purchased within one year after the sale of the original property: 105 percent of market value of original property as of its date of sale if a replacement dwelling is purchased within one year after the sale of the original property; 110 percent of market value of the original property as of its date of sale if a replacement dwelling is purchased within the second year after the sale of the original property.
If you feel you qualify for this exclusion, you must provide evidence of several items and complete appropriate forms. If your claim is approved, the base year value will be transferred to the replacement dwelling as of the latest qualifying event - the sale of the original property, the purchase of the replacement dwelling or the completion of construction of the replacement dwelling. This means that if you purchase or construct your replacement property first and sell your original property second, you will be responsible for the increased taxes on your replacement dwelling until your original property is sold.
Take heed: Transfers between counties are allowed only if the county in which the replacement dwelling is located has passed an authorizing ordinance. The acquisition of the replacement dwelling must occur on or after the date specified in the county ordinance.
Contact your county tax assessor for more information and to determine if your county is participating in this program. This could be a major savings and tax advantage.
This entry was posted on Tuesday, July 3rd, 2007 at 9:00 am and is filed under Buying, Finance, News You Can Use, Real Estate News, Selling, Taxes. You can follow any responses to this entry through the RSS 2.0 feed.
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