Assembly Majority Leader Holden’s AB 1378 to Expand Property Tax Relief for California Seniors

Tuesday, May 19, 2015

Bill would allow older taxpayers to downsize their property without tax penalty

Sacramento – Assemblymember Chris Holden’s AB 1378 to provide property tax relief for California seniors has been approved in Assembly Business & Professions Committee.  The measure would expand eligibility for when seniors sell or downsize by allowing both spouses to retain their own separate tax claims for transfer of a principal residence. 

Currently, California seniors over 55 and disabled adults are permitted to transfer the assessed value of their present home to a new home – but only one spouse or partner can claim the tax transfer.  AB 1378 ensures both property owners in a recognized partnership are entitled to the base tax transfer.

“This bill is simply about creating fairness by allowing older taxpayers to downsize their property without losing the tax benefit on their property,” explained Assemblymember Holden.  “This simple measure will help California seniors handle the growing cost of housing as baby boomers retire and downsize, are divorced or widowed.”

AB 1378 clarifies the rules for what is known as “base year value transfers” made under Proposition 60 which was approved in 1986.  It gave homeowners over the age of 55 a one-time right to transfer the assessed value of their home to a new residence. But it was limited to one transfer per married couple. AB 1378 Assembly Bill 1378 retains the original intent of Propositions 60/ and ensures that California’s seniors are not hit with significant property tax increases during their retirement years.

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