Change of Ownership

Leases
When real property is leased for 35 years or more, including options, reappraisal is required. If the tenant then transfers or subleases that property with more than 35 years remaining on the original lease, state law requires it to be reappraised again. However, if the owner transfers or sells the leased property, a reappraisal is required only if there is less than 35 years remaining on the lease.

Methods of Holding Title
A change in the method of holding title in itself does not cause a reappraisal. For example, if two equal partners incorporate, and each owns 50% of the corporate stock, no appraisal is required. In this case, the proportional ownership has not changed, only the method of holding title.

Summary
Under proposition 13, a reassessment takes place upon a change of ownership or transfer of a title. It is always best to review any proposed ownership change with the Assessor’s office in advance to determine any possible property tax consequences.

NOTE: For transfers that are not required to be reappraised, taxpayers should have their escrow and title companies note their parent/child or husband/wife relationship on their deed or other documents transferring title, including the Preliminary Change of Ownership Report (which is filed with the deed.) After the deed is filed with the County Recorder, application forms are mailed to the new owners within 30 days. They should be returned immediately.