For more than two decades, Santa Clara County has allowed seniors and the disabled from other counties to take advantage of a tax incentive to relocate to the county. This benefit provided by Proposition 90 is under attack and, if rescinded, could hurt seniors wishing to move and buy a home in the county.
Under Proposition 60 and 110, if a seller or spouse is over age 55 or if a seller of any age is permanently disabled when their original residence is sold, they may transfer the base year value of their home to a replacement primary residence of equal or lesser value in the same county, provided certain conditions are fulfilled. Proposition 90 extended this benefit to seniors and the disabled who move to counties that adopted Proposition 90 rules.
The Santa Clara County Assessor's Office wants the board of supervisors to eliminate this important senior tax benefit as a way to increase revenue. Proponents admit any revenue increase would be "slight" at best. REALTORS® say the economic benefits these transactions bring to the county outweigh a minimal increase in revenue.
"Given the limited number of affected parcels, it is not a business or financial decision that motivates REALTORS® to speak out on this issue. We support preserving Prop. 90 for the benefits it brings to the county and for qualified seniors and the disabled," says Gene Lentz, president of the Silicon Valley Association of REALTORS®. "Prop. 90 provides an incentive for seniors to move into smaller, less expensive homes without being penalized."
Proposition 90 eases the property tax burden that otherwise could prevent seniors from moving into smaller residences, so they can be closer to children and grandchildren living in Santa Clara County, says Lynn Grandi-Hill, whose parents moved from San Rafael to Willow Glen in 1989. Grandi-Hill says her parents, Charles and Barbara Grandi, were the first seniors to use the Prop 90 tax benefit passed by voters in 1988.
Grandi-Hill says their move was a blessing. "It was wonderful having them close by. They got to watch my children's school plays and my children got see them more often than they would have had they stayed in San Rafael," says Grandi-Hill.
Her parents have passed away, but Grandi-Hill is thankful they were able to take advantage of the tax benefit. "As much as families can stay connected and together, Prop. 90 is a positive thing for society in general," she says.
Proposition 90 counteracts the "lock-in effect" created by Proposition 13, which slowed the housing turnover and supply across the state. "Prop. 90 helps seniors wanting to live in the county. By living here they, in turn, help the county's economy since they will buy their groceries here, shop here, buy their gas here. They are a positive economic influence," says Mike Sibilia, president of the Santa Clara County Association of REALTORS®.
George, who doesn't want his last name disclosed for privacy reasons, says Proposition 90 played a major role in his move from Southern California to Santa Clara County. He bought a house in San Jose after his wife died because he wanted to be close to his son in San Carlos and daughter in Sunnyvale. "I considered a number of options and I can tell you Prop. 90 was a big factor in my decision," says George. "People considering rescinding it are short-sighted. It was a big savings for me, but people like me who move here also spend money here, so the county benefits too. "
REALTORS® believe rescinding Proposition 90 would reduce the number of qualified buyers considering a home in the county. Seniors are more likely to move and buy a new home once they qualify for Proposition 60 and 90 benefits. A California Association of REALTORS® survey indicates 52 percent of Prop 90 transactions would not have taken place if the measure was not in effect.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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