Reappraisal Exclusion Between Parent to Child

ALERT: In November 2020, California voters passed Proposition 19, which makes changes to property tax benefits for families (effective February 16, 2021). Please see the Proposition 19 FAQ for more information.

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, under limited circumstances, the property will not be reassessed if certain conditions are met and the proper application is timely filed.

Proposition 58 allow the new property owners to avoid property tax increases when acquiring property from their parents or children. The new owner's taxes are calculated on the established Proposition 13 factored base year value, instead of the current market value when the property is acquired.

Proposition 58, effective November 6, 1986, is a constitutional amendment approved by the voters of California which excludes from reassessment transfers of real property between parents and children. Proposition 58 is codified by section 63.1 of the Revenue and Taxation Code.

Transfers of real property excluded from reassessment by Proposition 58 are:

Transfer of principal residence (no value limit).
Transfer of the first $1 million of real property other than the primary residences. The $1 million exclusion applies separately to each eligible transferor. The $1 million is the factored base year value, not the fair market value.

Definition and Terminology specific to Proposition 58:

Child: Children include the following: sons and daughters, sons-in-law and daughters-in-law, stepchildren, and children adopted under 18.
Gift/Purchase: Transfers such as a gift or purchase between parents and children are excluded with a completed Prop. 58 form.
Principal Residence: Proposition 58 does not require that the parent or child use the transferred property as his or her principal residence. In addition, the $1 million limit does not apply to the transferor's principal residence.
$1 Million Exclusion: The $1 million exclusion for other property applies for each transferor. Therefore, one parent can transfer $1 million of other property and the other parent can also transfer $1 million of other property for a total combined exclusion of $2 million. These transfers are coordinated State-wide under the million dollar limit.
Legal Entities: Transfers directly between legal entities owned by parents and children are not entitled to the benefits of this measure.
Trusts: A transfer to or from a trust is treated just as a transfer to or from the trustor personally, provided the trust is revocable.
Date of Death of Decedent: The date of any transfer between parents and their children under a will or intestate succession is the date of a decedent's death, which must be after November 6, 1986 (the effective date of proposition 58).
Third Party: A third party is any person or entity that is not a transferee or transferor in the transfer between the parents and children.
Transfer of Real Property to a “Third Party”: For filing proposes, a transfer of the real property to a third party occurs when all the real property received is transferred to someone other than an original transferee or transferor. Therefore, a transfer may qualify for exclusion when a partial interest in the property received is transferred to a third party prior to an application being filed.

Filing Requirements:

A claim form must be completed and signed by the transferors and transferee and filed with the Assessor. A claim form is timely filed if it is filed within three years after the date of purchase or transfer, or prior to the transfer of the real property to a third party, whichever is earlier.

If a claim form has not been filed by the date specified in the preceding sentence, it will be timely if filed within six months after the date of mailing of the notice of supplemental or escape assessment for this property.

If a claim is not timely filed the exclusion will be granted beginning with the calendar year in which you file your claim.

Complete all of Sections A, B, and C and answer each question or your claim may be denied. Proof of eligibility, including a copy of the transfer document and/or trust may be required.

Proposition 19 became effective after February 16, 2021

Does Prop 19 apply to Mello-Roos Bonds and other direct levies?

No, direct levies like Mello-Roos bonds or school bonds are not covered by Proposition 19. Proposition 19 only affects the taxable value.
PLEASE NOTE: direct levies vary between properties and this can impact your tax bill substantially.

Can the replacement primary residence be purchased before the original primary residence closes escrow?

Yes, there is no requirement as to the order of the events. The requirement is that the two events must occur within 2 years of each other. Please note: If you purchase or construct your replacement dwelling first and sell your original primary residence second, you will be responsible for the increased taxes on your replacement primary residence until your original primary residence is sold.

If the replacement of a primary residence is purchased or newly constructed within two years of the sale of the original primary residence can their be an allowance for an extension of the two-year requirement?

Unfortunately, no provision was made in the Prop 19 language to extend the 2-year requirement for any reason, including hardship.

How many times may spouses transfer an original primary residence pursuant to Prop 19?

Each spouse may transfer a base year value up to three times.

On what date is the value of the Original and replacement primary residences determined for purposes of calculating the transferrable taxable value?

The value of the original and replacement primary residences are determined for purposes of calculating the transferrable taxable value as of the date of sale or the date of purchase or completion of new construction, respectively.

Must a claimant be "severely disabled" or "severely and permanently disabled" under Prop 19?

Prop 19 requires that a claimant be “severely disabled," not “severely and permanently disabled". In the Legal Analysis of the CA BOE, “severely disabled" is more broad than “severely and permanently disabled" as defined in RTC section 74.3, subdivision (b) and as required by RTC section 69.5, and is not limited to a physical disability.

Must both the sale of the original primary residence and the purchase of a replacement primary residence be completed on or after April 1, 2021?

No, the operative requirement is that the transfer of the base year value must be on or after April 1, 2021, and not the purchase or sale of either the original or replacement property. Assuming a claim is timely filed, the qualified transfer occurs on the later of either the date of the sale of the original primary residence or the date of the purchase or new construction of the replacement primary residence.

Tulare County

Office of the Assessor/Clerk-Recorder

Reappraisal Exclusion Between Parent to Child

ALERT: In November 2020, California voters passed Proposition 19, which makes changes to property tax benefits for families (effective February 16, 2021). Please see the Proposition 19 FAQ for more information.

Proposition 58 allow the new property owners to avoid property tax increases when acquiring property from their parents or children. The new owner's taxes are calculated on the established Proposition 13 factored base year value, instead of the current market value when the property is acquired.

Proposition 58, effective November 6, 1986, is a constitutional amendment approved by the voters of California which excludes from reassessment transfers of real property between parents and children. Proposition 58 is codified by section 63.1 of the Revenue and Taxation Code.

Transfers of real property excluded from reassessment by Proposition 58 are:

Transfer of principal residence (no value limit).

Transfer of the first $1 million of real property other than the primary residences. The $1 million exclusion applies separately to each eligible transferor. The $1 million is the factored base year value, not the fair market value.

Definition and Terminology specific to Proposition 58:

Child: Children include the following: sons and daughters, sons-in-law and daughters-in-law, stepchildren, and children adopted under 18.

Gift/Purchase: Transfers such as a gift or purchase between parents and children are excluded with a completed Prop. 58 form.

Principal Residence: Proposition 58 does not require that the parent or child use the transferred property as his or her principal residence. In addition, the $1 million limit does not apply to the transferor's principal residence.

Legal Entities: Transfers directly between legal entities owned by parents and children are not entitled to the benefits of this measure.

Trusts: A transfer to or from a trust is treated just as a transfer to or from the trustor personally, provided the trust is revocable.

Date of Death of Decedent: The date of any transfer between parents and their children under a will or intestate succession is the date of a decedent's death, which must be after November 6, 1986 (the effective date of proposition 58).

Third Party: A third party is any person or entity that is not a transferee or transferor in the transfer between the parents and children.

Filing Requirements:

A claim form must be completed and signed by the transferors and transferee and filed with the Assessor. A claim form is timely filed if it is filed within three years after the date of purchase or transfer, or prior to the transfer of the real property to a third party, whichever is earlier.

If a claim form has not been filed by the date specified in the preceding sentence, it will be timely if filed within six months after the date of mailing of the notice of supplemental or escape assessment for this property.

If a claim is not timely filed the exclusion will be granted beginning with the calendar year in which you file your claim.

Complete all of Sections A, B, and C and answer each question or your claim may be denied. Proof of eligibility, including a copy of the transfer document and/or trust may be required.

Proposition 19 became effective after February 16, 2021

No, direct levies like Mello-Roos bonds or school bonds are not covered by Proposition 19. Proposition 19 only affects the taxable value. PLEASE NOTE: direct levies vary between properties and this can impact your tax bill substantially.

Unfortunately, no provision was made in the Prop 19 language to extend the 2-year requirement for any reason, including hardship.

Each spouse may transfer a base year value up to three times.

The value of the original and replacement primary residences are determined for purposes of calculating the transferrable taxable value as of the date of sale or the date of purchase or completion of new construction, respectively.

221 S. Mooney Blvd., Room 102-E

Visalia, CA 93291-4593

(559) 636-5100

(559) 737-4468 Fax

assessor@tularecounty.ca.gov

221 S. Mooney Blvd., Room 103

Visalia, CA 93291-4593

(559) 636-5050

(559) 740-4329 Fax

recorder@tularecounty.ca.gov

221 S. Mooney Blvd., Room 105

Visalia, CA 93291-4593

(559) 636-5051

(559) 740-4329 Fax

clerk@tularecounty.ca.gov

No, direct levies like Mello-Roos bonds or school bonds are not covered by Proposition 19. Proposition 19 only affects the taxable value.
PLEASE NOTE: direct levies vary between properties and this can impact your tax bill substantially.