If you live within California, then there are plenty of benefits to relocation from one county to another. Obviously, if you want to move somewhere for work, school, or family, then there are plenty of spots in California that fit the bill precisely. But, Proposition 90 also makes the business of moving a potentially lucrative and fulfilling one. The prop effectively allows you to transfer property tax base assessments from one county to another.
For instance, let’s say that you sell your home in Los Angeles County to move to Riverside County. You’ll be able to transfer the property tax base from your Los Angeles County home to the home you purchase in Riverside County. This makes for some remarkably lower property tax rates for locations that might otherwise cost you a bundle.
Proposition 90 was passed by voters in 1988, and has since then provided California residents with an easy way to transfer their base tax assessments from one property to another. However, the prop is an “opt-in” sort of deal that is currently only applicable in 9 counties. The prop was initially envisioned as a way to provide a high turnaround rate to the homes of senior citizens, but it’s a law that can actually benefit a wide swath of the California population.
A Prop 90 ordinance was reinstated recently in Riverside County which is an ideal home for retirees or even commuters from Los Angeles. Many Realtors in the area are also noting that it’s perfect for anyone who wants a second home. The new adoption of the Prop 90 ordinance coincides with a slight increase in mortgage rates and home equity. This could be a perfect storm for property in the Riverside County area. With the ability to sell a home and then take that property tax base assessment into a luxury market, many homeowners will be chomping at the bit.
Additionally, 2014 looks to be a solid year for home sellers in Riverside County. Between the months of January and April, the Coachella Valley will be inundated with tourists who might take a fancy to having a second home there. Of course, the Prop 90 ordinance may or may not affect their decision depending on whether or not they want to sell their home in an applicable county. Either way, the market looks like its ripe for the picking in Riverside County whether you are looking to buy or sell.
Of course, as always, home sellers should likely price their homes to sell rather than to earn gobs of money. Most buyers aren’t willing to shell out a great deal of cash for a home when they can either continue living in their current location or find another reasonably priced home. Still, with the enticing opportunities that the Proposition 90 ordinance in Riverside County provides, many prospective buyers might be willing to pay a little extra just to have a home with low property taxes.
Many real estate agents are excited about the prospects of the housing market in Riverside County in 2014, and it will be interesting to see how everything shakes out.
Richard Denton is a California tax attorney with over 20 years of experience. He specializes in property tax issues that homeowners commonly face with in connection to property ownership.