Yes on Prop 5. It Helps. Mark William Murphy, Coldwell Banker, BRE: 01332517, 562 666 2509
I have some Voter information, some clarification to toss your way, so that we’re all prepared for the General Election.
I am a Realtor, Teacher, Investor and Author. I’m all about Real Estate. I write about it.I teach it. I speak on it. I buy it. I sell it. I manage it. I invest in it. It’s a profitable place to put your time and money. We all know that. We all see that based on our increased property values. I’m here to encourage us all to vote YES on Prop 5 and NO on Prop 10. These are the two most important property-related propositions in 30 years, since Prop 13, which keeps our property taxes at 1% of our property’s purchase price.
There are two laws already in the books: Prop 60 and 90. Only in participating counties and only if you’re 55 or older, does the state allow you to keep your original tax base when you sell your home and transfer it to another house you are buying, as long as it is, “of equal or lesser value.”
For example, say you bought your house for $500,000, but you sell it for $900,000. You can buy another house for $900,000 or below but keep the original tax base of $500,000 from the first house. You are only allowed to do this once, and only in 11 out of our 58 counties.
Here’s what a “Yes” to Proposition 5 would do: Prop 5 mandates that all 58 counties participate, and you can transfer your tax base as many times as you want, anywhere in CA. Another major advantage to Prop 5 is that it allows you to buy UP, a new property at a higher level. It no longer has to be, “of equal or lesser value.”
Say your kids have moved out and you don’t need that five-bedroom house any longer. You want to scale down on the size of your home, but don’t want to scale back on your financial investment – on the contrary. You want to buy that fancy, high-end condo on the beach! Sure, why not? Under Prop 5, there’s what’s called a “blended rate” that will help you afford it.
You originally bought that large house for $500,000. You sell it at $900,000 but you buy that fancy condo for $1M. You can keep the original tax base on the $500,000 and you only have to pay taxes on the difference between the $900,000 and the $1M – the $100,000. So, in this example, you’re paying taxes on $600,000 for a million-dollar condo. Good for you.
The important, game changing advantages to Prop 5 is that it’s going to allow people to move into “right-sized housing,” allow them to move or upgrade without fear of burdensome taxes, and releases them from a house that they were only keeping because of the 1% tax on their original, lower purchase price. Prop 5 will liberate people to do what’s right for them.
As much as we love our homes, Real Estate can be a tool to build a better life. Vote “Yes on Prop 5”and let it work for you when you need it to.