Stuck in Your Home?


Nef Cortez

By Nef Cortez

One of the factors driving California housing prices higher is that there are many people stuck in their homes because they cannot afford to sell the home where they live and move to another comparable one, or even one of lesser value. A large number of Californians purchased their homes more than 3o years ago, and their homes have appreciated in value substantially since then.

Many of these homeowners (and Diamond Bar has its’ share) have been able to stay in their homes because of Prop 13.  Since California voters approved passage of Prop 13 on June 6, 1978, a homeowner in the state is able to have their real estate property taxes on their home capped where the tax rate cannot increase more than 2 percent annually. (The effective tax rate cap is a result of the property re-assessment being capped at 2 % annually).

Without Prop 13, many “longtime” homeowners would not be able to stay in their homes because of annual property value re-assessments, and therefore, increases in their property taxes.  A homeowner who purchased their home for $100,000 in 1980, for example, would have had property taxes (based on Prop 13) of $1,000 annually, or about $83 per month, with a maximum increase of about $1.70 per month annually. Without the benefit of Prop 13 limits, that homeowner would have a home now worth approximately $750,000, and consequently, much higher property taxes.  Assuming the 1% cap (without the annual 2% cap on property re-assessment), this homeowner would be paying at least $7,500 in taxes annually, or approximately $625 per month.

The obvious benefit of lower property taxes and maintenance of affordable payments for homeowners who purchase many years ago is now constricting or inhibiting their ability to move to more appropriate housing.  The restriction is the cost of increased property taxes based on the sale of one’s residence, and the purchase of another.  There are a few counties in the state of California that allow for the transfer of the lower tax base for a homeowner 55 years or older, under Proposition 90, from one county in the state to another.  Out of 58 counties in the State of California, only 8? Have approved it for their counties.

Proposition 5 in this years November election proposes to equalize Prop 90 across the entire state. A homeowner otherwise qualified for Prop 90 benefits would not be limited to only one of the 8 counties that have approved it, but be free to move to any of the 58 counties in the State of California and be able to receive the benefits of Proper 90.


This article was written by Nef Cortez who is a licensed Real Estate Broker, Ca BRE # 00560181, licensed since 1976. He can be reached for more information via e-mail at, or website Please feel free to email any questions regarding real estate.