"Keeping it in the family"
This information, produced by the Santa Cruz County Assessor explains how parents and their children may transfer property without being reappraised.
What is Proposition 58?
Proposition 58 is a constitutional amendment approved by the voters of California on November 6, 1986, which excludes from reassessment transfers of certain real property between family members.
Which transfers of real property are excluded from reassessment by Proposition 58?
The following transfers of real property are affected by Proposition 58:
- Transfers of the primary residences between parents and children.
- Transfers of the first $1,000,000 of real property other than the primary residences between parents and children.
Who are considered children under Proposition 58?
Children is defined by any of the following:
- Any child born of the parent(s).
- Any stepchild or spouse of that stepchild while the relationship of stepparent and stepchild exists.
- Any son-in-law or daughter-in-law of the parent(s).
- Any adopted child who was adopted before the age of 18.
What value of the transferred property is considered towards the $1,000,000 exclusion limit?
It is the Proposition 13 value (factored base-year value) just prior to the date of transfer. Basically this is the taxable value on the assessment roll.
Can transfers of real property to or from a family partnership be eligible for Proposition 58 exclusion?
No. Transfers of real property must be between eligible parents and children, not legal entities.
Can a transfer of real property between grandparent and grandchild qualify for this exclusion?
On March 26, 1996 a constitutional amendment was approved by the voters (Proposition 193). Under its provisions, a transfer from grandparent to grandchild is generally not eligible for the exclusion unless both parents of the grandchild are deceased. However, this does not apply in all cases. The parents’ marital status on the date of the transfer may be a factor in determining qualification for the exclusion.
What are the time filing requirements of Proposition 58?
- Within three years of the transfer.
- Prior to transferring to a third party.
- Within six months of the mailing of a notice of supplemental or escape assessment.
How often can I apply for this exclusion?
As often as you wish, provided that the taxable value being transferred does not exceed the first $1,000,000 from real property other than the primary residence.
What if the Assessor sends me a claim form and I do not file in a timely manner?
The County Assessor will consider non-compliance to filing as a potential change of ownership, which would trigger a reappraisal and a possible increase in one's property taxes.
What must I do if I think I am eligible?
You may pick up a Proposition 58 claim form at our office or we can send one to you. The Proposition 58 claim form is also available online at http://www.co.santa-cruz.ca.us/tax/taxforms.htm. If you should have any questions concerning the completing of this form, please contact the County Assessor at 454-2002.