Patch Blog: 3 Ways to Save Money on Your Property Taxes

Three ways to save money on your property tax. Do you qualify?

It is often said that the only two things in life that we can count on are death and taxes. Just because this may be true does not mean we have to accept them without question. The first thing we can do is try and live a healthier lifestyle and thus, put off death for a little while longer. The second would be to pay fewer taxes. While it might be best to ask your CPA for the majority of your tax issues, I will present 3 possible ways to save on your property tax of which you may not be currently aware.

1)         The first is the most common: a reduction in property tax due to a decline in market value.

Proposition 8:  “…a constitutional amendment that allows a temporary reduction in assessed value when a property suffers a ‘decline-in-value’”

This means that if the value of your home has decreased since the time of purchase, you are entitled to a temporary reduction in your property taxes to reflect that change. This will stay in effect and the taxable amount will change yearly in accordance with current values until the market corrects back to the purchase price of your property. This could lead to huge savings, so it is a good idea to make sure that your present home is valued correctly in today’s market.  Follow the link below or copy/paste it into your browser to access more information published by the LA County Tax Assessor’s Office.

http://assessor.lacounty.gov/extranet/guides/brochures/E-23.pdf

2)         The second tax relief is for the permanently disabled. According to Proposition 110, if you or your spouse is permanently disabled, then you are allowed to transfer the base year value to another home or existing home with its current renovations. I have recently been working with a disabled client who was not aware of this tax benefit but is now happily going through the application process since learning about it. If you are disabled and have moved or renovated within the last few years then this benefit may apply to you.

“Proposition 110 is a constitutional initiative passed by California voters that provides property tax relief for severely and permanently disabled claimants when they sell an existing home and buy or build another...it allows the transfer of the base-year value of an existing home to a newly purchased or constructed home…”

For more information I have provided a link to the LA County Tax Assessor Proposition 110 brochure. Copy/paste into your browser if the link does not work.

http://assessor.lacounty.gov/extranet/guides/brochures/E-21.pdf

FAQ’s can be found at the web address below:

 http://www.boe.ca.gov/proptaxes/faqs/propositions110.htm#4

3)         The third tax relief comes under the heading Proposition 60/90.  This proposition was designed to assist senior citizens. If you or your spouse are over the age of 55 and you have a need to downsize for any reason, you can transfer the base year value of your current home to a new home. This could mean huge savings if you have been in your current home for many years.

“In most cases, these constitutional tax initiatives allow senior citizens to transfer the trended base value from their current home to a replacement property if certain requirements are met. This may result in substantial tax savings.”

One reason seniors might downsize is because of the expense of maintaining a larger property in their later years. Accordingly, this tax relief can prevent a tax increase due to buying a smaller home at today’s market value. For more information, click on the links provided or copy/paste into your browser.

http://assessor.lacounty.gov/extranet/guides/brochures/E-20.pdf

FAQs regarding this tax relief:

http://assessor.lacounty.gov/extranet/guides/prop6090.aspx

Death and taxes…I hope I have made the pill a little easier to swallow.

Billy Malone – Sun Realtors

Email – ban1997@sbcglobal.net

Website – www.billysrealestate.com