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PARENT/CHILD EXCLUSION
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Children can inherit their parent’s property without a property
tax increase. The executor of
the estate should notify the assessor’s office promptly to ensure
timely processing of a parent/child
exclusion from reappraisal.
Q: Must the assessor’s office be notified upon the death
of an owner?
A: Yes. The administrator or executor of the estate is required
by state law to notify the assessor’s office of a death of a property
owner.
Q: Can property be reappraised upon the death of the owner?
A: Yes, according to state law, death is considered a change of
ownership, and the property can be reassessed as of the date of death
for property tax purposes.
Q: Are all properties reappraised as a result of death?
A: No. If the property is transferred to the surviving spouse,
there is no reassessment of the property. In addition, if the property
is inherited by the children, a reappraisal may not be required.
Q: What is a parent/child exclusion?
A: The Parent-Child Exclusion applies to any real property purchases
or transfers between parents and children, which occurred on or after
November 6, 1986.
Q: What is the purpose and benefit of the Parent-Child
Exclusion?
A: This exclusion prevents an increase in property taxes when
real property is transferred between parents and their children.
Q: What is the definition of a “child”
for the purpose of this exclusion?
A: Natural children, children adopted before the age of 18, stepchildren
(as long as the parents are still married), and sons- and daughters-in-law
are considered children under this exclusion program.
Q: What type of property can be transferred without
a tax increase?
A: A parent may transfer their principal residence and any other
property valued up to $1,000,000 to their children. The properties will
not be reappraised providing that the proper Claim for Exclusion from
Reappraisal form is filed and approved by the Assessor’s Office.
Q: What is a Grandparent-Grandchild Exclusion?
A: California State law allows property to be excluded from reappraisal
when transferred between grandparent and grandchild, providing that a
Claim for Exclusion from Reappraisal form is filed and approved by the
Assessor’s Office. This exclusion is available only when both parents
of the eligible grandchildren are deceased.
Q: Can a transfer of real property between grandparent
and grandchild qualify for this exclusion if the parent disclaims any
interest in the grandparent’s property?
A: No. The parent must actually be deceased prior to the transfer
to the grandchildren.
Q: Will I get the exclusion automatically?
A: No. A Claim for Exclusion from Reappraisal form must be completed
and filed with the Assessor’s Office. Failure to file a claim will
result in a reassessment of the property. You will receive the exclusion
after your claim is approved.
Q: When must the claim for the exclusion be filed?
A: To prevent a supplemental tax bill from being issued, a claim
must be filed as soon as possible after the transfer or date of death.
Q: Is there a filing deadline for this exclusion?
A: A claim must be filed within three years of the date of transfer
or death, or prior to the sale or transfer to a third party. In addition,
a claim may be filed within six months after the mailing date of the supplemental
notice or escape assessment.
Q: Is there anything I can do after the deadline?
A: If a claim is filed after the legal deadline, the exclusion
may be granted but no refunds will be issued for prior years. It will
be granted for the year the claim is filed as long as the property has
not been sold to a third party.
Q: We have already sold the property we inherited
from our parents. May we still file a claim?
A: Yes. A reappraisal will occur for the period between the date
of the death and the sale to the third party. A supplemental bill will
be issued unless the heirs or beneficiaries apply and qualify for this
exclusion.
Q: Can children apply for a Parent-Child Exclusion
if their parents have also applied for a Reappraisal Exclusion for Seniors
on the same property?
A: No. The Reappraisal Exclusion for Seniors is a one-time only
tax benefit enabling senior citizens (55 years or older) to sell their
residence and transfer its low value to a replacement home. Since the
sold property must be reappraised, the children would receive no benefit
from a Parent-Child Exclusion.
Q: Can property held by my parents in a trust
qualify for this exclusion?
A: Yes. An inheritance or transfer to children within a trust
may qualify for this exclusion. The trust documents must be provided with
the claim.
Q: Can property held by a corporation or partnership
qualify?
A: No. In order to qualify, the transfer of property must be between
individuals, not individuals and a corporation or partnership.
Q: The claim form asks for information about
the transferor and transferee. Who is the transferor and who is the transferee?
A: The transferor is the previous owner (grantor, decedent, or
trustor). The transferee is the new owner (grantee, heir, or beneficiary).
Q: Do all children (transferees) need to sign
the claim form?
A: No, one signature is sufficient, however, all transferees must
be listed. A photocopied signature is not acceptable.
Q: How do I obtain a Parent-Child or Grandparent-Grandchild
Exclusion claim form?
A: You may request an exclusion claim form by calling our office
at (619) 531-5848, or by downloading the form from our web site by clicking
here, by visiting any of
our five locations, or by writing to us at:
Gregory J. Smith
County Assessor/Recorder/Clerk
1600 Pacific Highway, Room 103
San Diego, CA 92101
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