California Exempts More Transfers from Reassessment
A new California law is designed to give seniors and unregistered domestic partners a property tax break that's now available to married couples and some family members. It provides that if two people own real estate together, and when one dies the other inherits it, the property may no longer need to be reassessed for property tax purposes. If the property has gone up in value since the owners acquired it, this could give the survivor significant savings on local property taxes.
Unless a transfer is specifically exempt under state law, it is considered a "change in ownership," requiring reassessment. Formerly, the law exempted transfers between spouses or from a parent to a child, and some other kinds of transfers. The new law (Rev. & Tax Code § 62.3) makes a transfer from one cotenant to another at death exempt, if all these conditions are met:
- Two co-owners own 100% of the property as tenants in common or joint tenants. (Read more about forms of co-ownership.)
- They must have owned the property and used it as their principal residence for at least a year immediately before the death of one of them.
- The surviving co-owner must have a 100% interest in the property.
The surviving co-owner must sign an affidavit under penalty of perjury, stating that he or she lived on the property for the year before the co-owner's death.