Change In Ownership Reassessment Exclusions
Refinancing:
Refinancing is not considered a change in ownership, and refinancing
a property should not result in any action being taken by the
Assessor.
Husband/Wife (Inter-Spousal) Change in Ownership Exclusion:
Any transfer of property between spouses during marriage (or
transfers between former spouses after marriage in connection
with a property settlement agreement or dissolution) is excluded
from the change in ownership reassessment requirement of Proposition
13. In other words, transfers of property between husband &
wife should not trigger reassessments. No claim form is required;
however, if property you own was reassessed due to a transfer
that you think was inter-spousal, contact the Assessor immediately.
See the end of this page for contact information. (ref. R&T
63)
Parent/Child Change in Ownership Exclusion:
Transfers from parents to their children (or from children to their parents)
of a principal residence and up to $1 million (of the factored base year value)
of other property may be excluded from change in ownership reassessment,
providing a claim is filed and certain requirements are met.
This provision of the law is often referred to as ‘Prop
58.’ Click HERE for the Prop 58 claim form.
A claim for this exclusion must be filed within three years
of the date of transfer in order to receive the benefit back
to the date of transfer. If a valid claim is filed after that
initial three year time limit has expired, the exclusion will
only be available prospectively from the lien date following
the filing date and forward. This benefit applies to Parent/Child
transfers made on or after November 6, 1986, but the three year
filing period only applies to transfers occurring on or after
September 30,1990. For more information about these exclusions,
go to The Parent/Child Change in Ownership
Exclusions section.
An application must be filed with the Assessor. See the end
of this page for contact infomation.
Grandparent to Grandchild Change in Ownership Exclusion:
A similar exclusion was enacted for transfers of property
occurring on or after March 27, 1996, in which property
is transferred from a Grandparent to a Grandchild (but not from Grandchildren to Grandparents) under certain limiting conditions.
Among those limiting conditions are that all children
of the grandparents must be deceased as of the date of
transfer. For more information about these exclusions,
go to, The Grandparent/Grandchild
Change in Ownership Exclusions sections. Click HERE for the Grandparent to Grandchild Exclusion claim form.
An application must be filed with the Assessor. See the end
of this page for contact information (ref. R&T 63.1)
Proportional Interest Transfer Change in Ownership Exclusion:
Any transfer between an individual and a legal entity (or
between legal entities) that results solely in a change in the
method of holding title in which the proportional ownership interests
of the transferors and transferees remain exactly the same is
excluded from reassessment under Proposition 13. No claim form
is required; however, if property you own was reassessed due
to a transfer that you think qualifies for this exclusion, contact
the Assessor immediately. (ref. R&T 62(a)(2))
Parent-Child
Change in Ownership Exclusions
What Does the Exclusion
do?
By applying for this exclusion, property owners may be able
to avoid property tax increases when acquiring property from
their parents or children.
In the State of California, real property is reassessed at
market value if it is sold or transferred and property taxes
can sometimes increase dramatically as a result. However, if
the sale or transfer is between parents and their children, the
property will not be reassessed if certain conditions
are met and the proper application is filed.
Important Note: Property owners should understand that
claiming this exclusion may not always be to their benefit. See
"When is it not beneficial to claim this exclusion?"
Section for an explanation of that circumstance.
What Are The General
Requirements?
A properly completed, state approved application must be filed
with the Assessor as soon as possible following the transfer.
An applicant may also be required to provide additional documentation
to support their claim. Click HERE for the Prop 58 claim form.
The application must be filed within three (3) years of the
date of transfer (which is the date of death if the transfer
is the result of a death) in order to qualify for the exclusion
retroactive to the date of death. Applications may be filed at
any time after the three year deadline; however, those filed
after the three (3) year deadline will only become effective
for the Lien date in the assessment year in which they are filed
and will not be retroactive to the date of transfer.
Owners may claim the Parent-Child Exclusion on the residence
of a parent or child that has been sold or transferred
to them. In other words, the exclusion applies whether
the transfer is from parent to child, or from child to
parent. They may also claim the exclusion on other real
property up to $1,000,000 in full cash value.
The exclusion applies to sales and transfers both from parents
to their children and from children to their parents. It also
applies to transfers between a trust and a parent or child. It
does not apply to sales and transfers to and from partnerships,
corporations, or other legal entities.
The exclusion only applies to sales and transfers that occurred
after November 6, 1986. If a transfer occurs because someone
dies, the date of death is considered to be the date the property
transferred.
A child is defined as being a child by birth, marriage, or
adoption. If they are a stepchild or an in-law, they must have
been a stepchild or an in-law when the property sold or transferred.
If the child was adopted, the adoption must have occurred before
age 18.
When Is It Not
Beneficial To Claim This Exclusion?
In some circumstances, claiming the Parent/Child exclusion
actually may not be to an owner's benefit.
Example: If the transferred property was being assessed
at its current market value under Proposition 8 at time of transfer
(that is, its market value had fallen below its original Proposition
13 factored base year value), it may be beneficial for the new
owner not to claim the exemption and instead accept a new Proposition
13 base year reassessment. By doing so in this circumstance,
the reassessment can result in lower property taxes over time
by locking-in the lower market value as the property's new base
year value as of the date of transfer.
Otherwise, the higher original Proposition 13 base year value
set for the prior owners would some day be reinstated as market
conditions improve over time and at a level higher than they
would be if the property had received a new Proposition 13 Base
Year Value as of the date it transferred to the parent or child.
In any case, you may wish to consult with a real estate or
income tax expert before claiming this exclusion.
Does the Exclusion
Apply to Transfers Between Siblings (Brothers and Sisters)?
No. The exclusion applies only when property is transferred
from parent to child or from child to parent, but not when it
is transferred between brothers and/or sisters.
Does the Exclusion
Apply to Capital Gains or Income Taxes?
No, this exclusion is not related to State or Federal capital
gains or inheritance tax laws and has no affect upon them.
More Questions?
See the end of this page for contact information.
Grandparent
to Grandchild Change In Ownership Exclusions
What Does The
Exclusion Do?
By applying for this exclusion, property owners may be able
to avoid property tax increases when acquiring property from
their grandparents.
In the State of California, real property is reassessed at
market value if it is sold or transferred, and property taxes
can sometimes increase dramatically as a result. However, if
the sale or transfer is from a grandparent to a grandchild, the
property will not be reassessed if certain conditions are met
and the proper application is filed.
Important Note: Property owners should understand that
claiming this exclusion may not always be to their benefit. See
"When is it not beneficial to claim this exclusion?"
section for an explanation of that circumstance.
What Are The General
Requirements?
A properly completed, state approved application must be filed
with the Assessor as soon as possible following the transfer.
An applicant may also be required to provide additional documentation
to support their claim. Click HERE for the Grandparent to Grandchild Exclsion claim form.
The application must be filed within three (3) years of the
date of transfer (which is the date of death if the transfer
is the result of a death) in order to qualify for the exclusion
retroactive to the date of death. Applications may be filed at
any time after the three year deadline; however, those filed
after the three (3) year deadline will only become effective
for the Lien date in the assessment year in which they are filed
and will not be retroactive to the date of transfer.
This exclusion applies only to transfers occurring on or after
March 27, 1996. If a transfer occurs because someone dies, the
date of death is considered to be the date the property transferred.
This exclusion only applies to transfer from grandparents to
grandchildren and not to transfers from grandchildren to grandparents
(differs from parent/child exclusion in that respect).
To qualify, a grandchild’s own parents must either have
both been deceased before the date of transfer from grandparent
to grandchild, or, in the case where only the grandparent’s
child is deceased, the surviving in-law parent must have either
been divorced or remarried before the date of transfer.
A grandchild is defined as a "child" of the grandparent’s
own children "Children" is defined under the law that
offers the similar parent/child exclusion which provides that
a child may be a child by birth, marriage, or adoption. If they
are a stepchild or an in-law, they must have been a stepchild
or an in-law when the property sold or transferred. If the child
was adopted, the adoption must have occurred before age 18.
When Is It Not
Beneficial To Claim This Exclusion?
In some circumstances, claiming the Grandparent to Grandchild
(or parent/child) exclusion actually may not be to an owner’s
benefit.
Example: If the transferred property was being assessed
at its current market value under Proposition 8 at time of transfer
(that is, its market value had fallen below the grandparent’s
original Proposition 13 factored base year value), it may be
beneficial for the new owner not to claim the exemption and instead
accept a new Proposition 13 base year reassessment. By doing
so in this circumstance, the reassessment can result in lower
property taxes over time by locking-in the lower market value
as the property’s new base year value as of the date of
transfer.
Otherwise, the higher original Proposition 13 base year value
set under the grandparent's ownership would some day be reinstated
as market conditions improve over time and at a level higher
than they would be if the property had received a new Proposition
13 Base Year Value as of the date transferred to the grandchild.
In any case, you may wish to consult with a real estate or
income tax expert for advice before claiming this (or the Parent/Child)
exclusion.
Does the Exclusion
Apply to Capital Gains or Income Taxes?
No, this exclusion is not related to State or Federal capital
gains or inheritance tax laws and has no affect upon them.
More Questions?
See the end of this page for contact information.
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to Assessment Information
Contacting Us  |
Madera County Assessor's Office
200 W. 4th Street
Madera, CA 93637
Telephone: (559) 675-7710
Fax: (559) 675-7654
Office Hours: 8:00 AM to 5:00 PM
Monday through Friday
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