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Property Tax Relief for Northern California Homeowners, Part III

In our last post we introduced property tax relief for homeowners in disaster areas who choose to repair or rebuild their properties. Property tax relief is also available, with certain exceptions, to those who prefer to move to a new property.


Moving to a new property

If you prefer to move to another location, under California Revenue and Taxation Code (R&TC) Section 69 you can retain your previous property tax rate and apply it to the purchase of a new home, so long as certain conditions are met:

  • The replacement property must be “similar in size, utility, and function” to the previous property.
  • The new property must be valued at no more than 120% of the previous one at the time it was destroyed. Any amount exceeding 120% of the market value of the previous property will be added to the adjusted base year value and the total will become the replacement property's new base year value.

If you plan to move to a new property in the same county as your previous one, you have five years from the date of the disaster to purchase or construct the replacement property and to claim this relief.


Relocating to a different county

If you prefer to relocate to another county, under R&TC Section 69.3 you can still take advantage of this tax relief but additional rules apply:

  • The destroyed and replacement properties must have been/be your principal residence.
  • The replacement must be made within three (instead of five) years of the date of the disaster.
  • The full cash value of the replacement property must be equal to or lesser than the original property. The definition of “equal or lesser” varies, depending on how soon you locate your replacement property:
    1. If purchased within the first year of the original property damage – 105%
    2. If purchased in the second year following the original property damage – 110%
    3. If purchased in the third year following the original property damage – 115%
  • The county in which the new property is located must be among those with an ordinance that accepts such inter-county taxable value transfers.

The following ten counties currently have this type of ordinance, allowing homeowners who have been displaced by a natural disaster to move to another location but still maintain their previous property tax rate: Contra Costa, Los Angeles, Modoc, Orange, San Francisco, Santa Clara, Solano, Sonoma, Sutter, and Ventura. Note that you should always check first with the county in which you are planning to relocate, as these ordinances tend to change.


California tax attorneys

Time is of the essence! To learn more about how you or your business may obtain property tax relief following California wildfire damage, contact the tax attorneys at Moskowitz, LLP today.

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