Downsizing homes can save Californians big bucks
Empty-nesters take notice, a PropertyShark study published last month shows how much homeowners in 20 major California markets can save by buying a smaller home.
For example, the study shows in Los Angeles downsizing from a five-bedroom to a three-bedroom home can save up to $750,000. For an overview of how this strategy may apply click here.
In the late 1980’s, California passed two propositions (60 and 90) that give homeowners, older than 55, a property tax break when they sell their primary residence. It requires them to buy another residence that costs the same or less. The intent was to help empty nesters downsize without getting nailed by the higher property taxes on their new home.
Prop. 60 allows homeowners who are older than 55 or permanently disabled to sell their primary residence and use the established assessed value for their replacement home of equal or lesser value restricted to within the same county. Prop 90 expands that to allow the acceptance of transfers to different counties, provided the county allows transfers. For more information, click here