Ownership Transfers within the Family

The value used is the Proposition 13 value (also called factored-base-year value) immediately prior to the transfer date. Basically, this would be the taxable value on the assessment roll.

There is no limit. However, each transferred residence must qualify as a principal residence.

• Any child born to the parent; or
• Any stepchild or stepchild's spouse while the relationship of stepparent and stepchild exists; or
• Any son/daughter-in-law of the parent; or
• Any child statutorily adopted before the age of 18.

Proposition 58 applies to any transfer of real property between parent and child on or after November 6, 1986, and to transfers between spouses on or after March 1, 1975.

• Real property between spouses; and/or
• Transfers between parent and child of the principal residence; and/or
• Transfers between parent and child of the first $1,000,000 in value of other real property.

The transferor is the current owner of property being transferred. The new owner is the transferee.

Yes. For example, a mother and a father could combine their individual $1 million benefits to exclude from reassessment a transfer to their children of $2 million of value in real property that is not the parents' principal residence.

No. The residence need only qualify as the principal residence of the transferor.

A principal residence is a dwelling for which the owner/claimant has been granted, in the name of the parent or the child, either a homeowner's exemption (claimant owned and occupied as principal residence at the time of sale or within two years of the acquisition of the replacement property) or a disabled veteran's exemption (claimant a veteran with service-related disability and a California resident on January 1 of claim year). Only a reasonable portion of the land will be considered a part of the principal residence if the land exceeds the area reasonably necessary as a site for the residence.

The exclusion claim must be filed either

• within three years of the purchase or transfer of the property, or
• prior to the subsequent transfer of the property to a third party, whichever is earlier. However, if the claim is filed within six months after the date of mailing of the Assessor's notice of supplemental or escape assessment issued as a result of the purchase or transfer for which the claim is filed, the claim will be deemed timely. Further, if the property has not been transferred to a third party, the Assessor may grant the exclusion prospectively pursuant to an otherwise untimely claim, if certain conditions are met.

Let's explain these terms. The base year is the year when the property or portion thereof was purchased, newly constructed, or underwent a re-appraisable change in ownership by the current transferor. The base year value (also called 'original base year value') is the full market value of the home in that base year, typically either the purchase price or the 'Proposition 13 value.'

Proposition 13 was a 1978 Constitutional amendment to control rising property taxes. It limited the assessed value of existing real property to the1975-1976 assessed values, limited tax rates to one percent of assessed value (plus voter-approved surcharges), and limited inflation-based value increases to no more than two percent annually. Proposition 13 value is the full market value, adjusted by these limits. The factored base year value is the original base year value, adjusted by the annual inflation factor for each taxable year of the current transferor?s ownership.

Your claim must be filed with the County Assessor within three years of the date of transfer, or prior to the subsequent transfer of the property to a third party, whichever is earlier.