Tag Archives: proposition 13

Change of Ownership Means Reassessment

house from momDear Liza:  I live in California. I have no children or family. If I leave my house to a friend will the property taxes go up under Prop 13? I just find information about kids and trusts, but not unrelated persons inheriting.  Yes, if you leave your house to a friend, the property taxes will be reassessed. The way Proposition 13 works is that any “change of ownership” results in a reassessment of that property based on its current fair market value, unless an exception applies.  There are exceptions to reassessment for a transfer of property from parents to children (or children to parents).  There is an exception to reassessment for a transfer of property from an individual to a revocable trust for his or her benefit.  But there is no exception for a transfer from you to your friend.

Property Taxes and Inheriting a House in California

Dear Liza: We are pondering whether or not to assume a home that belongs to my wife’s parents.  The home is currently being valued as part of an estate that will be designated to my wife and her brother.  Our question is will the property tax be adjusted from its purchase price in 1968 to its current estate value?  My wife’s parents lived in California.  No. If your wife’s parents left their house to their son and daughter,  the heirs can request an exclusion from reassessment from the county assessor where the house is located.  A parent can leave their primary residence to their children and there will be no reassessment upon that transfer. Your wife and her brother can inherit the house and pay the property taxes that their parents paid.  But they have to file a form requesting that exclusion from reassessment.  This form, called a Claim for Reassessment Exclusion for Transfer Between Parent and Child (Proposition 58), can be downloaded at each county’s assessor website.  Of course, if they someday sell the house to a new owner, that new owner’s property taxes will be calculated on the home’s new value.