Propositions 58 and 193
Propositions 58 and 193 are two constitutional initiatives to provide property tax relief by preventing reassessment of value when real property is transferred between parents and children (Proposition 58) or between grandparents and grandchildren (Proposition 193).
Voters determined that it is fair and equitable to exclude reassessment on properties transferred between parents and children (and grandparents and grandchildren.) These two propositions make it easier to keep real property “in the family.”
Proposition 58: if the parent or child who acquires the transferor’s property (with an assessed value up to $1,000,000) files a claim (subsequently approved by the Assessor), reassessment of the property will be excluded.
Proposition 193: if the grandparent or grandchild who acquires the transferor’s property (with an assessed value up to $1,000,000) files a claim (subsequently approved by the Assessor), the reassessment will be also be excluded.
Under both of these provisions, if the property has already been reassessed, the reassessment will be reversed, a corrected tax bill will be issued, and/or a refund will be processed.
How Children Are Defined
For the purposes of Proposition 58, ‘children’ are defined as:
How Grandchildren Are Defined
Under Proposition 193, the same relationship requirements for children apply to grandchildren, step-grandchildren and grandchildren-in-law. However, the parents of the grandchild(ren), who would otherwise qualify for a Proposition 58 exclusion from the grandparents, must be deceased.
Proposition 58 applies to transfers occurring on or after November 6, 1986. Proposition 193 applies to transfers occurring on or after March 27, 1996.
Claims must ordinarily be filed within three years of the date of transfer, or date of death, but before transfer to a third party. However, a claim will also be considered timely if it is filed within six months after the mailing of the Notice of Assessed Value Change.
Legislation effective January 1, 1998 (Senate Bill 542), now allows claims to be filed after the above deadlines, subject to certain conditions. The property must not have been transferred to a third party.
In addition, the exclusion may only be applied to future tax years. It cannot be applied retroactively back to the date of transfer.
Claim forms are distributed at your local tax assessor’s office and/or may be available on your local tax assessor’s website.
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