Change in Ownership Reassessment Exclusions

Revenue and Taxation Codes (R & T Code) referenced below are found on the California Legislative Information website.

Refinancing:

Refinancing a real estate loan is not considered a change in ownership, and should not result in a reassessment. There is no form to complete for this exclusion.  The Assessor will typically request additional information from the property owner to verify that the transaction was for refinancing purposes only.  (ref. Revenue and Taxation Code 62(c))

Husband/Wife (Inter-Spousal) Change in Ownership Exclusion:

Transfers of property between spouses during marriage are excluded from reassessment.  Transfers between former spouses after marriage (in connection with a property settlement agreement or dissolution) are also excluded.  No form is required.  However, additional documentation may be necessary.  (Ref. R & T Code Sec. 63). 

Registered Domestic Partners Change In Ownership Exclusion:

Beginning January 1, 2006, transfers of real property between registered domestic partners (as defined in Section 297 of the Family Code) are not considered assessable changes in ownership.  There is no form to complete.  However, documentation will be requested.  (ref. Revenue and Taxation Code 62(p))
This exclusion includes (but is not limited to):
  • A transfer in (or out) of a trust for the benefit of a partner.
  • The addition of a partner on a deed.
  • A transfer upon the death of a partner.
  • A transfer pursuant to a settlement agreement.
  • A transfer pursuant to a court order upon termination of the domestic partnership.

Cotenancy Change in Ownership Exclusion:

Transfer of a cotenancy interest from one cotenant to another due to the death of one cotenant (and after January 1, 2013) may be excluded from reassessment if certain conditions are met. (Ref. R & T Code Sec. 62.3). 

This exclusion is explained in the State Board of Equalization Letter to Assessors (LTA) 2013-21.

Cotenancy Residency Exclusion Affidavit (BOE 58 H)

Parent/Child Change in Ownership Exclusion (PR58):

Transfers of real property from parents to children (or children to parents) may be excluded from reassessment if a claim is filed and certain requirements are met.  This exclusion applies to a principal residence and up to $1,000,000 (taxable value) of additional real estate.  This provision of the law was called “Prop 58”.

A claim for this exclusion must be filed within 3 years of the date of transfer in order to receive this benefit as of the transfer date.  If a claim is eligible, but not filed timely, the exclusion will begin with the calendar year in which the claim is filed.  The exclusion benefit applies to parent/child transfers made on (or after) November 6, 1986. 

The 3 year filing period applies to transfers occurring on (or after) September 30, 1990.   Claims filed more than 60 days after the date of the second notice of potential eligibility for exclusion from change in ownership will be subject to a $175 processing fee. (Ref. R & T Code Sec.63.1?)

Important: Voters passed Proposition 19 in November 2020. 

The portion of that law that affects parent to child transfers and grandparent to grandchild transfers is effective 2/16/2021.  Transfers that occur prior to that date fall under Proposition 58 and Proposition 193 provisions, respectively.  Transfers that occur on or after 2/16/2021 are subject to the new provisions under Proposition 19. Go to Proposition 19 to learn more.
Proposition 19 has had an effect on this exclusion; be sure to use the correct form:
Transfer Between Parent and Child Occurring on or after February 16, 2021
Transfer Between Parent and Child Occurring before February 16, 2021

Grandparent to Grandchild Change in Ownership Exclusion (PR193):

Transfers of real property from grandparents to grandchildren (one direction only) occurring on (or after) March 27, 1996 may be excluded from reassessment if a claim is filed and certain requirements are met.  One of the limiting conditions to this exclusion is that all parents (of the child(ren) to whom the property is being transferred) who qualify as children of the grandparents transferring the property, are deceased as of the date of transfer [R & T Code Sec. 63.1(c)]. 
Proposition 19 has had an effect on this exclusion; be sure to use the correct form:
Transfer Between Grandparent and Grandchild Occurring on or after February 16, 2021
Transfer Between Grandparent and Grandchild Occurring before February 16, 2021

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 (the proportional ownership interests of the transferors and transferees remain unchanged) is excluded from reassessment under Proposition 13.  No claim form is required.  However, additional documentation may be necessary.  (Ref. R & T Code Sec. 62(a)(2))