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.
Proposition
58 - Transfer between Parent and Child Eligibility Requirements
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.
Proposition
193 - Transfer from Grandparent to Grandchild Eligibility
Requirements
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.
Frequently
Asked Questions
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.
- Online:
Forms are available from the Assessor’s website: lacountyassessor.com.
- Email:
assessor@co.la.ca.us
- Phone:
Call 213.893.1239
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).
