A historical designation can provide a property tax reduction. San Diego is a relatively young town, but many residents are beginning to take notice of one of our most valuable resources, our historic sites and homes. The Mills Act, named for San Diegan James Mills, a former State Senator, provides an important monetary incentive designed to encourage the preservation, maintenance, and restoration of designated historic properties. Typically, property owners can expect a 20% to 70% savings on their properties' taxes. If you have questions on the calculation of the assessed value of your home, please call the Assessor's office at 858-505-6262 or visit the Assessor's web site.

If you are 55 years or older and are considering purchasing a new home but do not want to lose your low property tax basis, consider whether you qualify for the tax savings provided by Propositions 60 and 90. A homeowner who is at least 55 years old may be able to transfer, one time, the property tax basis of his/her current home ("relinquished home") to a new home if the new home’s value is less than or equal to the value of the relinquished home. Depending on when you purchased your home, this could result in tens of thousands of dollars of annual tax savings. Consult with your tax advisor to ensure you qualify and the timing is right to exercise this one-time benefit, then contact Noel to help plan your next steps in the home buying and selling process.

If your move takes you from one California county to another, check with the local tax assessors to ensure reciprocal agreements have been made to honor the tax-basis transfer. For more information about moving within or to San Diego County contact Noel or, visit the San Diego County Tax Assessor’s web site.

If you are considering selling an investment property but want to defer or avoid paying capital gains taxes, a 1031 Exchange might be a good option. Under section 1031 of the Internal Revenue Code, a real property owner can sell his or her property and then reinvest the proceeds in ownership of like-kind property to defer the capital gains taxes. To qualify as a like-kind exchange, property exchanges must be done in accordance with the rules set forth in the tax code and in the treasury regulations. The 1031 exchange can offer significant tax advantages to real estate buyers. Often overlooked, a 1031 exchange is considered one of the best-kept secrets in the Internal Revenue Code.

To learn more about 1031 exchanges, visit Exchange Resources or contact Noel to discuss alternative properties that meet your investment goals.