One big concern for seniors is the impact of selling a home that is no longer functional or safe to inhabit due to age or medical conditions.
Proposition 58 is designed to safeguard against substantial property tax impacts on certain specific types of transfers among family members.
Contact your legal or tax advisor for further guidance.
What is Proposition 58?
Proposition 58 is a constitutional amendment approved by the voters of California on November 4, 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 million 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 parents
- 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 trasfers 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)
This excludes transfers from grandparent to grandchild under the strict condition that both parents of the grandchild are deceased as of the date of transfer or purchase.
What are the time filing requirements of Proposition 58?
Within three years of the transfer.
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 ones liability.