A few months ago I wrote a post called You CAN take it with you - Your Property Tax Value, that is.
Recently I had a discussion with a gentleman who dropped by my office. He and his wife own a duplex in the City and are considering downsizing. They live on the top floor. The bottom unit is unoccupied, and has been for 20 years. The bottom unit has been depreciated to almost nothing. he wanted to know my opinion of what value he could transfer based on Prop 60.
There are a number of considerations involved. He kept talking about the 'basis' value. Since the unit has been depreciated, this would definitely come in to play when they sold it as relates to capital gains taxes. But does this have any impact on Prop 60 values? Prop 60 is easy to understand when you're talking Single Family Homes. Or even condos. But multiple units? A different story.
I recently read a post elsewhere concerning a similar event, only backwards. The seller wanted to sell his SFR and buy a duplex. The poster said that the value of his home would compare to the value of one of the duplex units, the one he would occupy. I assume for property tax purposes, he could transfer his tax basis to half the duplex, while the other half would be taxed at full value?
Taking this in reverse, the gentleman in question could sell his duplex and transfer half the value (if the two units are equal) to a new SFR. For example, the duplex sells for $1 mil. so he can buy a new home for $500,000 or less and transfer his original tax basis. Complicated stuff!
Looks like I'll be making a call to the San Francisco assessor's office on Monday for more detailed information.....
John M Scott, Broker / Owner, Scott Keys Properties, Certified Distressed Property Expert (CDPE), Council of Real Estate Brokerage Managers (CRB), serving San Francisco and the surrounding San Francisco Bay Area