San Francisco Real Estate - Residential

A way to downsize in San Francisco without increasing your property taxes!

A reader asks:

We've owned a very large home in San Francisco for many years, and would like to downsize into a smaller property yet remain in the City. Our home is now worth a lot more than we paid for it, and we have very low property taxes. Is there a way can we buy a new home without increasing our taxes?

Our reply:

In San Francisco there is a means by which you are able to sell your home and buy something of less value within 2 years, provided you sell it within the same county in which you buy (with certain exceptions as noted below). There are many restrictions on this one time transfer of your taxes, but may be of benefit if you fall within the guidelines.

According to a 2006 article on the California State Board of Equalization's website, "Propositions 60, 90, and 110 are constitutional amendments approved by the voters of California. They provide for the transfer of a property’s base year value from an existing residence to a replacement residence, under certain conditions, for qualified persons over the age of 55 or persons of any age who are severely and permanently disabled.

"Conditions that need to be met in order to qualify for the exclusion are:

• Both properties must be located in the same county, unless the county in which the replacement residence is located has an ordinance that allows intercounty base year value transfers.
• As of the date of transfer of the original property, the transferor (seller) or a spouse residing with the transferor must be at least 55 years of age, or be severely or permanently disabled.
• At the time of sale, the original property must have been eligible for the Homeowners’ Exemption, or entitled to the Disabled Veterans’ Exemption. (Generally, the replacement dwelling must be of equal or lesser value than the original property.
• The replacement dwelling must have been acquired or newly constructed within two years of (before or after) the sale of the original property.
• The owner must file an application within three years following the purchase date or new construction completion date of the replacement property.
• The original property must be subject to reappraisal at its current fair market value. Therefore, transfers of the original property that are excluded from reappraisal (e.g., most transfers between parents and children) will not qualify."

The article goes on to explain the process, answers many question you might have and gives a number for their Technical Services Section at 916-445-4982 which you may call if you have questions.

- Janis Stone, Mick Orton

posted by SFResidence.com @ 7:46 AM