Own a home in California and are Handicapped/Disabled ! Help is at hand!

Written by Posted On Friday, 17 July 2015 11:29

Own a home in California and are Handicapped/Disabled ! Help is at hand!

 

Becoming disabled can be a struggle, whether it is physically, emotionally, mentally (must lead to a physical disability to use Prop 110) or medically! Help for someone owning a home is available with California Proposition 110!  Proposition 110 is a constitutional initiative passed by California voters and provides property tax relief for severely and permanently disabled claimants, when they sell an existing home and buy or build another.

 

If you or a spouse, that lives with you, is severely and permanently disabled, you can buy a home of equal or lesser value, than your existing home and transfer the factored base year value of your existing home to your new property. Also, you can modify your current home, as long as the modifications directly satisfy disability requirements, without the modifications being assessed as new construction (this can also be for someone living in your home permanently and also permanently disabled). Once you have filed and received this tax relief, neither you nor your spouse who resides with you will qualify to receive this benefit again.

 

For property tax purposes, a severely and permanently disabled person is defined as "any person who has a physical disability or impairment, whether from birth or by reason of accident or disease, that results in a functional limitation as to employment or substantially limits one or more major life activities of that person, and that has been diagnosed as permanently affecting the persons ability to function, including, but not limited to, any disability or impairment that affects sight, speech, hearing, or the use of any limbs.  You must provide proof of severe and permanent disability and file a claim with the assessor who will then determine if you qualify. Appropriate proof of disability is a certificate signed by a licensed physician or surgeon attesting to the claimants severe and permanent disability.  If you are filing a request for property tax exclusion for modifications made to improve accessibility, in addition to the claim and proof of disability, a statement must be provided that identifies the construction, installation, or modification that was necessary to make the structure more accessible. 


The meaning of "equal or lesser value" depends on when you purchase the replacement property. In general, equal or lesser value means:

                 100% or less of the market value of the original property if a replacement property were purchased or newly constructed before the sale of the original property, or

                  105% or less of the market value of the original property if a replacement property were purchased or newly constructed within the first year after the sale of the original property, or

                  110% or less of the market value of the original property if a replacement property were purchased or newly constructed within the second year after the sale of the original property

 

The law that allows for transfers of base year value between counties (Prop 90), merely allows each county board of supervisors to adopt an ordinance accepting transfers from other counties. It is the discretion of each county to allow such transfers. The county in which your replacement property is located must have an ordinance that accepts inter-county transfers.  As of November 20, 2014, the following ten counties in California have an ordinance enabling the inter-county base year value transfer:

Alameda, Los Angeles, Riverside, San Diego, Santa Clara, El Dorado, Orange, San Bernardino, San Mateo & Ventura

 

Since the counties indicated above are subject to change, I recommend contacting the county to which you wish to move to verify Proposition 90/110 eligibility.

 

The eligibility requirements for Proposition 110 are;

   You or a spouse residing with you must be severely and permanently disabled when the original property was either sold or modifications were completed.

   Both your original and replacement property must be eligible for the homeowners' or disabled veterans' exemption and the replacement property must be your principal residence.

   The replacement property must be of equal or lesser value than the original property. The "equal or lesser" test is applied to the entire replacement property, even though the owner of the original property may acquire only a partial interest in the replacement property. Owners of two qualifying original residences may not combine the values of those properties in order to qualify for a Proposition 110 base-year transfer to a replacement property of greater value than the more valuable of the two original residences.

   The replacement property must be purchased or built within two years (before or after) of the sale of the original property.  To receive retroactive relief from the date of transfer, you must file your claim within three years following the purchase or completion of new construction of the replacement property.  The disabled person, spouse or legal guardian must submit a Physician's Certificate of Disability (Form BOE-62A) with the claim.

The original property must be subject to reappraisal at its current fair market value unless the buyer(s) also qualify the property as a replacement property for a base year value transfer due to intracounty/ intercounty disaster relief or a base year value transfer for persons aged 55 or over (This means that you can take a property tax transfer again, if you have already taken a senior - Prop 60 transfer). Therefore, most transfers between parents and children will not qualify.

 

DISABLED PERSONS CLAIM FOR EXCLUSION OF NEW CONSTRUCTION California law provides that certain construction, installations, or modifications of existing single- or multiple- family dwellings can be excluded from increases in property taxation if the work is performed to make the dwelling more accessible to a severely and permanently disabled person who is a permanent resident of the dwelling.

 

To qualify for this exclusion:  The construction, installations, or modifications must be completed on or after June 6, 1990;  The disabled person must be a permanent resident (not necessarily the owner) of the dwelling; and  The dwelling must be occupied by the owner and therefore eligible for the homeownersexemption.  To claim the exclusion, the disabled person, his or her spouse, or legal guardian must submit to the Assessor the following:  A statement signed by a licensed physician or surgeon of appropriate specialty which certifies that the person is severely and permanently disabled as defined above. The statement must identify specific disability-related requirements necessitating accessibility improvements or features, and a statement that identifies the construction, installation, or modification that was in fact necessary to make the structure more accessible to the disabled person.

 

Generally, claimants will be granted property tax relief under section 69.5 of the Revenue and Taxation Code only once. However, the Legislature created an exception to this one-time-only clause. If a person becomes disabled after receiving the property tax relief for age, the person may transfer the base year value a second time because of the disability.

Please Note: 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.

You really can avoid some tax increases, by knowing California Law!

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Fred Eckert

Fred Eckert,a 25+ year veteran Chicago Title Insurance sales representative. Google San Diego Title Insurance... An Assistant Vice President, specializing in foreclosures, Short Sales, Charitable Institutions, Bank Owned properties, investors, buying and selling real estate, title insurance and escrow, 1031 exchanges, real estate needs and Education. Has a Master's Degree in Business, & is an accomplished speaker and trainer. A retired USN pilot, he also held positions as Legal officer, Safety officer, Operations officer, Detachment Officer in Charge, Class Desk Officer and Division officer. He is a member of the Coronado Association of Realtors, the Pacific Southwest Association of Realtors, the San Diego Host Lions Club, the San Diego Creative Investors Association and the North San Diego Real Estate Investors Association and Friends of Children United Society. His book, "198 Super Things to Think, Say and Do", has been well received in the Investment and Real Estate communities. Search 'San Diego Title Insurance" on Google!
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