As we all now know, new tax law in California, impacting the parent-to-child exclusion and grandparent-to-grandchild exclusion to legally avoid property tax reassessment, became active 2/06/21.  The “base year value transfer provision” went into affect 4/01/22. The State Board of Equalization (BOE), along with the CA Assessors’ Association, established seven new forms for County Tax Assessors…

Forms to deal with new property tax laws:

1) BOE-19P, Claim for Reassessment Exclusion for Transfer Between Parent and Child Occurring on or After Feb 16, 2021

2) BOE-19G, Claim for Reassessment Exclusion for Transfer Between Grandparent and Grandchild Occurring on or After Feb 16, 2021

3) BOE-19B, Claim for Transfer, Base Year Value to Replacement Primary Residence for Persons at Least Age 55 Years

4) BOE-19C, Certification of Value by Assessor for Base Year Value Transfer
  
5) BOE-19D, Claim for Transfer, Base Year Value to Replacement Primary Residence for Severely Disabled Persons

6) BOE-19DC, Certificate of Disability

7) BOE-19V Claim for Transfer of Base Year Value to Replacement Primary Residence for Victims of Wildfire or Other Natural Disaster

Remaining excluded from property reassessment

The transfer of what lawyers and trust lenders now call a “principal residence” or “primary residence” between a parent and child can be excluded from property reassessment… Meaning reassessment which would increase property taxes significantly – if the fair market value, meaning current valuation, of an inherited “family home” on the date of transfer – is less than the “sum of the factored base year value” plus $1,000,000.

So if the current or “fair market” value of an inherited family home (on the date it’s transferred) goes over the sum of the “factored base year value” plus $1,000,000 – the amount that is over this sum amount will always be added onto the so-called factored base year value.  Unless these new Prop 19 tax laws are repealed. But for now, that is the way things are. 

And with the help of a good trust lender and estate attorney… we can  make good use of the popular Proposition 58 property tax breaks, transferring property taxes in California under Proposition 19; taking full advantage of the useful (albeit now-limited) CA property tax transfer, in order to transfer parents property taxes to legally avoid property tax reassessment when inheriting property taxes through a parent-child transfer or parent to child property tax transfer, otherwise known as a California parent to child exclusion from property tax reassessment – to retain inherited property, and at the same time keep parents property taxes intact.                 

Deadline to Submit Documentation

The form “Claim for Reassessment Exclusion for Transfer Between Parent and Child” which occurred on or after Feb 16, 2021 has to be completed and filed as of 3-years from the purchase or transfer of an inherited property – or before the transfer of that property to a 3rd party. Or whichever is sooner.

So if the claim form hadn’t been completed and filed by or after Feb 16, 2021, it will have to be filed inside of 6-months after the date of mailing of the notice of “supplemental” or “escape assessment” for the property.

If a claim isn’t filed in this manner, the exclusion will be approved but starting with the calendar year in which the claim is filed.  We realize this is a bit daunting, perhaps confusing to some… however your attorney or trust lender will explain exactly how this all works in detail.

Proper Transfree Forms

Also, a “transferee” must complete and file a Claim for Homeowner Property Tax Exemption (BOE‐266) or Claim for Disabled Veteran’s Property Tax Exemption (BOE‐261‐G) within one year from the date of property purchase or transfer.

For transfers that were implemented before Feb 16, 2021, you have to use the Claim for Reassessment Exclusion for Transfer Between Parent and Child form (BOE‐58‐AH).

If you require assistance obtaining a loan to a trust, please complete the following form or call 877-464-1066 to speak to a qualified Trust Loan representative.