Something You Should Care About: 'Tax Portability'

I know, I know, your eyes probably glazed over the moment you read those words: 'tax portability' but please bear with me. This one's an important issue that could mean more money in your pocket in the future. With a median home price of $600,000 in California, it's a stretch for middle-class families to purchase a home these days--an issue of concern to many including the California Association of Realtors. Earlier this year a new CAR task force started exploring the feasibility of expanding property tax basis portability--specifically looking at the circumstances under which a homeowner would be allowed to transfer his or her property tax basis to a new home. Tax portability would allow homeowners to move up without getting hit with an increased tax bill. In our current market, if a homeowner moves their property tax is based on the purchase price of the new home. Currently moving seniors can retain their property tax basis so long as they move withing the same county and the replacement home is of equal value or lesser value than the sale price of their former home (this under Prop 60 passed in 1986). There is also a Prop 90, which deals with seniors moving across state lines but only seven counties participate in that program. The CAR task force is looking at various possibilities including removing Prop 60's program limitation to seniors and at the  impact on local governements from the loss of property tax revenues if Prop 60 were expanded. No word yet on when we can expect a final report but this one's worth keeping an eye on.