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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.
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).
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