Prop 58 Prop 193 Parent Child Grandparent Grandchild FAQ
Thanks for visiting our website to check out the Propositions 58 & 193 – Parent/Child and Grandparent/Grandchild FAQ. Hopefully this FAQ will answer your questions about what Prop 58 and Prop 193 are and what it can mean for you with regard to your property taxes.
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Prop 58 Prop 193 Parent Child Grandparent Grandchild FAQ
Proposition 58 is codified by section 63.1 of the Revenue and Taxation Code. Proposition 193, effective March 27, 1996, is a constitutional amendment approved by the voters of California which excludes from reassessment transfers of real property from grandparents to grandchildren, providing that all the parents of the grandchildren who qualify as children of the grandparents are deceased as of the date of transfer.
Proposition 193 is also codified by section 63.1 of the Revenue and Taxation Code. In the State of California, real property is reassessed at market value if it is sold or transferred and property taxes can sometimes increase dramatically as a result. However, if the sale or transfer is between parents and their children, or from grandparents to their grandchildren, under limited circumstances, the property will not be reassessed if certain conditions are met and the proper application is timely filed.
These propositions allow the new property owners to avoid property tax increases when acquiring property from their parents or children or from their grandparents.
The new owner’s taxes are calculated on the established Proposition 13 factored base year value, instead of the current market value when the property is acquired.
Transfers may be result of a sale, gift, or inheritance. A transfer via a trust also qualifies for this exclusion.
For property tax purposes, we look through the trust to the present beneficial owner. When the present beneficial ownership passes from a parent to a child, this is a change in ownership that is eligible for the parent-child exclusion.
By doing so in this circumstance, the reassessment can result in lower property taxes over time by locking in the lower market value as the property’s new base year value as of the date of transfer.
Otherwise, the higher original Proposition 13 base year value set under the transferor’s ownership would someday be reinstated as market conditions improve over time and at a level higher than they would be if the property had received a new Proposition 13 base year value as of the date the property was transferred. In any case, you may wish to consult with a real estate or estate planning expert for advice before claiming this exclusion.
A “child” for purposes of Proposition 58 includes:
- Any child born of the parent(s).
- Any 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.
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.
An eligible “grandchild” for purposes of Proposition 193 is any child of parent(s) who qualify as child(ren) of the grandparents as of the date of transfer.
Are my grandchildren eligible transferees of my property for purposes of Proposition 193 if my daughter passed away and she was divorced from her husband (my ex-son-in-law) who is still living?
Are my grandchildren eligible transferees of my property for purposes of Proposition 193 if my daughter passed away and her husband (grandchildren's father) has not remarried?
I have raised my two stepchildren alone since their mother, my wife, died ten years ago. Now that the children are grown adults, their grandparents wish to gift a piece of bare land to them. Can this transfer be sheltered from reappraisal under Proposition 193?
I want to give my second home to my grandson, but his father, my son, is still alive. Can my son file a disclaimer so that my grandson is eligible for the grandparent-grandchild exclusion?
I'm thinking of giving several rental properties to my children. Can I decide which child gets the exclusion?
My mother recently died. She owned three properties via her trust. The trust provides that my two sisters and I are to share and share alike all the trust assets. However, each of us wants to take title to a separate property. Would the properties be eligible for the parent-child exclusion?
For further information on trust and will distribution, please see Letter To Assessors No. 91/08.
My father's property was in a trust. The assessor asked for a copy of the trust. Can I provide a certification of trust in lieu of the trust documents?
My mother was the sole beneficiary of two trusts which owned a family partnership that owned real property. I recently inherited the partnership interest via the trusts. Is this eligible for the parent-child exclusion?
I am over 55 and planning on selling my long-time residence to my child. Can my child benefit from the parent-child exclusion and can I also transfer my base year value (Proposition 60) when I purchase a replacement property?
Is there a limit placed on my principal residence's assessed value that may be excluded from reassessment?
Claim for Reassessment Exclusion for Transfer Between Parent and Child, Form BOE-58-AH
For grandparent-to-grandchild transfers (Proposition 193):
Claim for Reassessment Exclusion for Transfer Between Grandparent and Grandchild, Form BOE-58-G
Copies of these forms are available from your assessor’s office or you may check with your county’s website as some provide a downloadable form. Most counties have a website which may be accessed via the following link:/proptaxes/assessors.htm.
Even though BOE forms are state designed and approved, BOE forms are administered by the county.
I know I’ve filed claims and used part of my $1 million exclusion, but I don’t know how much. Is there a way that I can get this information?
Yes, the Board of Equalization maintains a state-wide database to track the $1 million exclusion. However, information in the database is available only upon written request. Information is not provided by telephone. If you want to know how much you have used, please send a fax to the County Assessed Properties Division at 1-916-285-0134. Please include: (1) a statement that you want to know how much of your parent-child exclusion you have used, (2) your name, (3) your social security number, and (4) a return fax number or address. If you do not have access to a fax machine, please mail your request to the following address:
State Board of Equalization
County Assessed Properties Division, MIC: 64
P.O. Box 942879
Sacramento, CA 94279-0064
Filed parent-child exclusion claims are not public documents and not subject to public inspection. Since Board of Equalization’s state-wide database is compiled from claim information, the database is also confidential.
Revenue and Taxation Code section 63.1(i) provides that information regarding the parent-child exclusion is available to the transferor or his/her spouse, the transferor’s legal representative, the trustee of the transferor’s trust, or the executor or administrator of the transferor’s estate.
In addition, information is available to the transferee or his/her spouse, the transferee’s legal representative, the trustor of the transferee’s trust, or the executor or administrator of the transferee’s estate.
A child, by virtue of being a child, is not a person who is eligible to get their parents’ information unless they are acting in one of the above-mentioned roles.
I am an attorney. Can I find out how much of the $1 million exclusion my client has used? Do I need written authorization from my client to request this information?
Please send a fax on your letterhead to the County Assessed Properties Division at 1-916-285-0134 that includes:
(1) a statement that explains your relationship to the client,
(2) your client’s name,
(3) your client’s social security number, and
(4) a return fax number if your office has multiple locations.
If you are representing a child of deceased parents and the child needs to know how much the parents have used in order to administer their estate, please include an additional statement that explains the child’s role in their estate and the parents’ names and social security numbers.
I am a CPA and have authorization to file tax documents on behalf of my clients. Can I find out how much of the $1 million exclusion my client has used? Do I need written authorization from my client to request this information?
(1) a written authorization signed by your client that says we can release their information to you,
(2) your client’s name,
(3) your client’s social security number, and (4) a return fax number if your office has multiple locations.