Qualified Contaminated Property
Overview
Proposition 1 allows for base year value transfers to from a qualified contaminated property to a replacement property within the same county. A qualified contaminated property is one that has been designated as toxic or environmental hazard by a state or federal agency.
About Proposition 1
California law allows an owner of a qualified contaminated property to transfer the base year value of that property to a comparable replacement property of equal or lesser value that is acquired or newly constructed after January 1, 1995.
In addition, a replacement property must meet all of the following requirements:
- It must have been acquired or newly constructed within five (5) years after the date of the sale or transfer; and
- It must be used in the same manner as the qualified contaminated property; and
- A claim for relief must be filed within three (3) years after the replacement property is acquired or newly constructed.
Requirements
- Contaminated property and replacement property must be within the same county
- Condition as a result of contamination
- Residential must be uninhabitable – unfit for human habitation
- Non-residential has to be unusable – unhealthy and unsuitable for occupancy
- Owner limitation
- Could not have caused contamination
- Known of contamination when property was acquired or constructed
- Be related to individual or entity that caused contamination
- Contaminated property must be sold
- Replacement must be acquired or constructed within 5 years after the sale of contaminated property
- Replacement property must be comparable
- Similar in function and utility – used in the same manner
- Equal or lesser value
A claim must be filed within 3 years after the purchase or new construction of replacement property
In addition to the claim, the property owner must provide proof that he did not cause contamination.