Q. What triggers the assessor to reassess a property? My aunt and my mother owned a house as joint tenants. My mother added me as a joint tenant some years ago. After she passed away, that left me and my aunt as joint tenants. My aunt recently passed away. After I filed an affidavit of death of joint tenant to show that I am now the sole owner, the house was reassessed. I thought that the death of a joint tenant didn’t trigger reassessment? Johanna
A. Hi Johanna,
Generally speaking, joint tenancy transactions (including creation, transfer, or termination of a joint tenancy) do count as a “change in ownership” which triggers reassessment of the property, but you may qualify for an exclusion. In order to claim the exclusion, you must file a separate affidavit with the County Assessor.
As you know, property taxes are based on the assessed value of the real estate. Under Proposition 13, that assessed value is determined when the property is sold or transferred, and is not changed until the property changes ownership. That assessed value is considered the property’s base year value. Usually the purchase price is used as the base year value, but if no money changes hands, or if the sales price does not reflect market value, the County Assessor will come up with a new assessment based on market conditions.
Creating, transferring, or terminating a joint tenancy is generally considered a “change in ownership,” triggering reassessment. Cal. Rev. &Tax § 61(f). However, there are several exclusions to this rule, including a new one that may apply to your situation.
2012 legislation created a new exclusion from reappraisal for some cotenancy (joint tenancy and tenant in common) transfers upon death. Cal. Rev. &Tax § 62.3. (effective Jan. 1, 2013). There are several conditions that must be met before this exception applies:
(1) There are only two cotenants, who together own 100% of the property;
(2) The transfer results in the surviving cotenant owning 100% of the property;
(3) The real property was the principal residence of both cotenants when the decedent died; and
(4) Both cotenants continuously owned and resided in the property for at least one year immediately preceding the death.
The survivor must sign an affidavit affirming residency in order to claim the exclusion. You can download the form from the Sacramento County Assessor’s office at Affidavit of Cotenant Residency, BOE-58-H.
So, if your aunt passed away after Jan 1, 2013, you may qualify for this exclusion. There is no time limit for filing the necessary affidavit, and if you have already paid taxes on the reassessed amount, you can receive retroactive tax relief. LTA 2013/021 Change In Ownership Exclusion—Cotenants (Cal. State Board of Equalization Letter to Assessors, Feb. 20, 2013).
Other possible exclusions, and the relevant forms, are listed on the Sacramento County Assessor’s Office Change in Ownership Reassessment Exclusions web page. They include such situations as refinancing; transfers between parents and children; transfers from grandparent to grandchildren (but not the reverse); spousal or domestic partner transfers; and transfers between a person and a legal entity in which the proportional ownership interests of the transferors and transferees remain exactly the same.
For more information, you may wish to contact the Sacramento County Assessor’s Office or talk to an attorney. You are always welcome to visit the Law Library to do some research on your question, as well.
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