Property taxation: change in ownership: family homes and farms.

Plain English Breakdown

The official source material does not provide specific details on the exact impact of these changes on property taxes or the workload for local tax officials.

Property Tax Rules for Family Homes and Farms

The bill changes how property taxes are calculated when family homes or farms are transferred between certain relatives after the death of a family member, extending the one-year period to establish residency.

What This Bill Does

• Extends the one-year period during which an eligible transferee must establish a family home or farm as their principal residence if the transfer is due to the death of an eligible transferor and certain court orders prohibit establishing residency within that year.
• Requires eligible transferees to file specific documents with local tax officials, including a copy of a court order indicating that probate matters prevented them from establishing residency within one year.

Who It Names or Affects

• People who inherit family homes or farms from relatives after their death under certain conditions.
• Local tax officials responsible for handling property taxes and related paperwork.

Terms To Know

Ad valorem

A type of tax based on the value of a property.

Transferor

The person who gives or transfers something to another person, such as a family home or farm.

Transferee

The person who receives something from another person, such as a family home or farm.

Limits and Unknowns

• It is not clear how much extra work this will create for local tax officials.
• This bill does not provide additional funding to help local agencies deal with the new requirements.
• The exact impact on property taxes and state reimbursements to local agencies remains uncertain.

Official Summary Text

SB 288, as amended, Seyarto.
Property taxation: change in ownership: family homes and farms.
The California Constitution limits the amount of ad valorem taxes on real property to 1% of the full cash value of that property, defined as the county assessor’s valuation of real property as shown on the 1975–76 tax bill and, thereafter, the appraised value of the real property when purchased, newly constructed, or a change in ownership occurs after the 1975 assessment, subject to an annual inflation adjustment not to exceed 2%.
Pursuant to constitutional authorization, existing property tax law, on and after February 16, 2021, excludes from classification as a change in ownership the purchase or transfer of a family home or family farm, as those terms are defined, of the transferor in the case of a transfer between parents and their children, or between grandparents and their grandchildren if all the parents of those grandchildren are
deceased, if the property continues as the family home or family farm of the transferee, as specified. For purposes of the transfer of a family home, that law requires the transfer to be of a principal residence of the transferor and to become the principal residence of the transferee within one year of the transfer. That law also requires the transferee to file for the homeowners’ or disabled veterans’ exemption within a year of the transfer, as described.
This bill would provide
that, in the event of a transfer to an eligible transferee as a result of the death of an eligible transferor by an order entered pursuant to specified existing law,
that
the one-year periods described above shall be deemed to
commence as of the
end one year after the
effective date of
the order, as specified.
certain court orders resolving the disposition of the property if the eligible transferee files specified documents with the assessor, including a copy of a court order indicating that a probate matter prohibited the eligible transferee from establishing the property as their principal place of residence within the one-year period described above. By expanding the duties of local tax officials, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.
This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.
This bill would take effect immediately as a tax levy.

Current Bill Text

Download Bill PDF