County Approves Prop. 90 Tax Break

Los Angeles became the eighth--and largest--county in California to join a program providing a major property tax break to older homeowners after the Board of Supervisors agreed Thursday to implement Proposition 90.

The ballot measure, which won overwhelming support from California voters last Nov. 8, offers tax relief to property owners over 55 when they buy a house in Los Angeles County for the same price or less money than the house they sold in another county.

Designed to encourage older homeowners to relocate to smaller replacement or retirement homes, the measure allows eligible property owners to transfer the same tax rate they enjoyed under Proposition 13--but only if the county to which they move has agreed to participate in the program.

Joined 7 Other Counties

Los Angeles did just that Thursday when the board voted unanimously to join seven other counties--Contra Costa, Kern, Marin, Orange, Riverside, San Diego and San Mateo--in implementing Proposition 90.

The measure applies to homeowners moving from one county to another, while a previous state law already allows older homeowners to keep their same pre-Proposition 13 tax rates when they move within a county.

Before supporting the plan, board Chairman Ed Edelman voiced concerns that the tax break for older residents may result in a loss of much-needed property tax revenue for the financially strapped county. But Assessor John J. Lynch assured the board that moving ahead with Proposition 90 would not create a burden for the county.

“Frankly, this measure will make money for Los Angeles County. It’s our opinion that we will make lots of money for Los Angeles County with passage of this proposition, and we are wholeheartedly in favor of it,” Lynch said.

Lynch maintained that Los Angeles--with its high cost of living--is not considered an attractive retirement community by many older home buyers. And at most, his office expects to process only about 1,000 applications annually under Proposition 90.

Freeing Up Houses

Lynch placed the estimated loss in tax revenue at up to $1 million, but added that Proposition 90 also will encourage other older residents in the county to sell their homes, freeing up houses for new, younger buyers. As a result, the county stands to more than make up the revenue loss with increased property taxes from the new homeowners.

Those expectations were echoed by other speakers who urged the supervisors to approve Proposition 90, which--although approved by voters statewide--is not binding and requires county approval before it can go into effect.

Daniel Cartagena, representing the American Assn. of Retired Persons, said the proposition “helps older people and helps free up much-needed housing for younger adults and their children.”

‘Win-Win Situation’

Ken Flowers of the Los Angeles County Boards of Real Estate agreed. “Our original impression that it was a win-win situation is actually true,” he said.

Assemblyman Dave Edler (R-Long Beach), the author of Proposition 90, also urged the supervisors to back the measure and said their action could influence other counties reluctant to implement the program because of fears that they will lose property tax revenue. “Our surveys show that people are watching and waiting for Los Angeles County,” he said.

The majority of the state’s 58 counties have yet to decide whether to implement the measure, although nine counties have already rejected the plan--El Dorado, Fresno, Monterey, Sacramento, San Luis Obispo, Santa Cruz, Shasta, Sonoma and Tulare.

Dennis Miller, an associate property appraiser for the State Board of Equalization, said six other counties have indicated that they have no intention of passing an ordinance implementing Proposition 90.