| Propositions 58 & 193, providing tax relief for property transfers between parent and children in California real estate transactions. South Bay Brokers can help find current South Bay homes for sale, real estate agents, and current home values in Southern California's South Bay. Find real estate listings with our free home search and South Bay MLS access, open houses, Realtors®, and our listings. Our free real estate services feature all South Bay cities and neighborhoods including Manhattan Beach, Hermosa Beach, Redondo Beach, Torrance, El Segundo, Hollywood Riviera, Hawthorne, Hollyglen, and Palos Verdes. | |
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Propositions 58 and 193 These constitutional
initiatives provide property tax relief for real property transfers
between parents and children and from grandparents to grandchildren.
Collectively, they make it easier to keep property “in the
family.” In general, Proposition 58 states that real property transfers, from parent to child or child to parent, may be excluded from reassessment. Proposition 193 expands this tax relief to include transfers from grandparent(s) to grandchild(ren). In both cases, a claim must be filed within three years of the date of transfer to receive the full benefit of the exclusion. Requirements and Guidelines for Propositions 58 and 193 The principal place of residence must have been granted a Homeowners’ Exemption or Disabled Veterans’ Exemption before the transfer. This residence need not be the new principal residence of the person that acquired the property. No limit is placed on the assessed value of a principal residence that may be excluded from reassessment. In addition to tax relief on the principal residence, you may claim an exclusion on transfers of other real property with an assessed value of up to $1,000,000. The $1,000,000 exclusion applies separately to each eligible transferor. A $2,000,000 limit applies to community real property of an eligible married couple. Transfers by sale, gift, or inheritance qualify for the exclusion. Transfers between parents and children as individuals, from grandparents to grandchildren as individuals, between joint tenants, from trusts to individuals, or from individuals to trusts may qualify for the exclusion. A claim must be filed within 3 years after the date of purchase or transfer for which the claim is filed or prior to transfer to a third party, whichever is earlier, or within 6 months after the mailing of the notice of supplemental or escape assessment, issued as a result of the transfer for which the claim is filed. Untimely filed claims are subject to certain conditions, i.e., the property must not have transferred or resold to a third party and the claim will only apply to future tax years. If reassessment of your property occurs before the approval and processing of your timely filed claim, the reassessment may be reversed. In these situations, a corrected tax bill and/or a refund will be processed. The real property must be owned by the eligible transferor who is either the parent or child. You must be a parent or child. A child may be a son, daughter, son-in-law, daughter-in-law, stepchild, or child adopted before the age of 18. Spouses of eligible children are also eligible until divorce or, if terminated by death, until the remarriage of the surviving spouse, stepparent, or parent-in-law. You must complete
a Claim for Reassessment Exclusion for Transfer between Parent and
Child form for a gift or purchase of real property between parent
and child. The real property must be owned by the eligible transferor who is the grandparent. You must be a grandchild whose parent(s) qualify as the deceased child(ren) of the grandparents as of the date of transfer, and you must be the decedent's child. You must complete
a Claim for Reassessment Exclusion for Transfer from Grandparent
to Grandchild form for a gift or purchase of real property from
grandparent to grandchild. Q. I recently inherited the family home, but I don’t really want to live there. Do I have to make it my principal residence to qualify for the Proposition 58 exclusion? A. No. Q. My parents just gave me their house that sits on ten acres of land. Isn’t there a limit for excluding the principal residence from reassessment? A. Yes. Ten acres exceeds the amount of land necessary for a home site. In your case, only a reasonable amount of land would be considered part of the principal residence. Q. I’m thinking of giving several properties to my children. Can I decide which child gets the exclusion? A. The person who files first will get the exclusion. Q. My two sisters and I recently bought several properties from our parents. Which one is entitled to the exclusion? A. If you jointly own the properties with your sisters, you’ll have to decide that for yourselves. On the other hand, if three separate properties were transferred individually, the first eligible person who files a claim will get the exclusion. How Do I File for Proposition 58/193 Tax Relief? Claim forms are available from several sources. Choose the most convenient for you.
What Form Do I Need? Claim for Reassessment
Exclusion for Transfer Between Parent and Child (OWN-88). Claim for Reassessment
Exclusion for Transfer from Grandparent to Grandchild (OWN-143).
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