In June, 1986, the voters approved Proposition 50, a constitutional measure which authorized the Legislature to permit the transfer of the base-year value of a taxpayer's property that has been substantially damaged or destroyed by a Governor-declared disaster to a comparable replacement property located in the same county.
Following the approval of Proposition 50, the Legislature enacted legislation which implemented the constitutional provisions. These provisions can be found in Section 69 of the Revenue and Taxation Code. Recent Governor-declared disasters proclaimed for Orange County include floods in the 1990's, the Laguna Beach fires in 1993, severe rainstorms in 2005, the Santiago Canyon wildfire in 2007 and the Freeway Complex fire in 2008.
Effective January 1, 2010, Senate Bill 824 (Stats. 2009, Ch. 67), in part, amends sections 69 and 69.3 of the Revenue and Taxation Code. Prior to January 1, 2010, the phrase "substantially damaged or destroyed" meant that the property as a whole must have sustained physical damage amounting to more than 50 percent of its current market value immediately prior to the disaster. In certain situations, even though a home was completely destroyed, the property's land value was much higher than the value of home and the property did not meet the 50 percent test. This section of the law has been amended to read:
"Substantially damaged or destroyed" means property where either the land or the improvements sustain physical damage amounting to more than 50 percent of its full cash value immediately prior to the disaster.
Section 69 allows a taxpayer, whose property has been destroyed or damaged by a Governor-declared disaster, to transfer his or her property's base-year value to a comparable replacement property purchased or newly constructed in the same county, provided:
The full cash value of the replacement property does not exceed one hundred twenty percent (120%) of the full cash value of the damaged or destroyed property. However, a taxpayer will not be denied relief if the one hundred twenty percent (120%) benchmark is surpassed. Rather, the Assessor adds to the transferred base-year value, the current market value of the portion of the replacement property's full cash value that exceeds the 120% benchmark.
Section 69 provides that the replacement property must be acquired or newly constructed within five (5) years following the disaster.
Property is substantially damaged or destroyed if the land or the improvements sustain physical damage amounting to more than 50 percent of its full cash value immediately prior to the disaster, as determined by the Assessor of the county in which the property is located.
Section 69 allows a taxpayer, whose property has been destroyed or damaged by a Governor-declared disaster, to transfer his or her property's base-year value to a comparable replacement property purchased or newly constructed in the same county. Certain restrictions apply, and some replacement properties will not qualify. Before attempting to transfer your base year value under the provisions of Section 69, please call us at (714) 834-2727 for more information.
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