The Difference Between Parent/Child and Sibling to Sibling Transfer In its simplest form, parent to child (and grandparent to grandchild) transfers are excluded from reassessment, but sibling to sibling transfers are subject to reassessment when it comes to property taxes. An exclusion occurs when an assessor does not reassess a property because the property is eligible to be excluded if the owner files a claim. As your trusted private 3rd party lending company in California, we are here to break it all down for you: Proposition 58, codified by section 63.1 of the Revenue and Taxation Code, which went into effect in California in 1986, is a constitutional amendment that excludes from reassessment transfers of real property between parents and children, according to the California State Board of Equalization. Proposition 193, which went into effect in 1996, is a constitutional amendment which excludes from reassessment transfers of property from grandparents to grandchildren, providing that all the parents of the grandchildren who qualify as children of the grandparents are deceased at the time of transfer. In the State of California, property is reassessed at market value when sold or transferred. As a result, property taxes often increase dramatically. But if the sale or transfer is between parents and their children, or from grandparents to their grandchildren, the property does not have to be reassessed if stated conditions are met and the correct application is filed in a timely manner. A “child” for purposes of Proposition 58 includes: Any child born of the parent(s). Any stepchild while the relationship of stepparent and stepchild is still in existence. Any son-in-law or daughter-in-law of the parent(s). Any adopted child provided they were adopted before 18 years of age. A person adopted after reaching the age of 18 is not considered a “child” for purposes of the parentchild exclusion. An eligible “grandchild” for purposes of Proposition 193 is any child of parent(s) who qualify as child(ren) of the grandparents at the date of transfer. These propositions allow the new property owners to avoid property tax increases in the event they acquire property from their parents or children or from their grandparents. The new owner’s taxes are calculated on the Proposition 13 factored base year value, rather than the current market value when the property is acquired.
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