Have you thought about how you would transfer real estate to your children if need be? Here are facts about important propositions to remember when transferring your property to children:
- Proposition 13: This proposition applies only to California real estate and when passed, reduces the property tax on homes, businesses and farms. Upon the Proposition 13 Tax Reform, property tax was frozen at the value in 1976 which authorized property owners to estimate the amount of future property taxes, and determine the maximum amount taxes could increase as long as he or she owned the property (information gathered from this link). If you would like to read more about Proposition 13, please click here.
- Proposition 58: Simplified, Proposition 58 prevents reassessments on transfers between parent(s) and child(ren). This includes the primary residence, regardless of home value. However, transfers that are not included in reassessment are: gifts/sale’s/inheritance transfers, primary residence, and the first $1 million in transfers of real property that is not the primary residence. To learn more about Proposition 58, please click here.
- Proposition 60 and Proposition 90: Though these two propositions are similar (homeowners must be at least 55 years or older and must reside in California), they have one important difference. Prop 60 refers to transfers made within the same county and Prop 90 refers to transfers made to another county. Nonetheless, in both propositions, the homeowner can qualify for 60/90 benefits, require the same filing deadline, tax relief on new construction of home (under market value of home), etc. To read more about Proposition 60/90, please click here.
If you have questions regarding the information previously mentioned, please feel free to contact McDowall Cotter’s office at (650) 572-7933 or visit our website at www.mcdlawyers.net . Our intelligent and dedicated staff will be able to assist you with any questions or needs you may have.