California’s property tax laws and regulations are complex and can result in unexpected property tax reassessments for those who are not familiar with them. In contrast, when correctly understood and applied, taxpayers can minimize reassessments by leveraging exceptions and exclusions.
Property taxes are reassessed upon a change in ownership. In general, all transfers of real property are a “change in ownership” unless specifically excepted. Most well known is the “Parent-Child” exclusion under Prop 13, which permits a parent and child to transfer between themselves a personal residence and up to $1 million of assessed value of other property without triggering a reassessment. Transfers between a grandparent and grandchild can qualify for a similar exception if the grandchild’s parents are deceased.
Other exceptions apply for the transfer to real property to and from certain trusts, and for transfers into and out of a business so long as each owner of the property has or receives a proportionate interest in the business.
For more information on property taxes, see tax section