- Real estate that is transferred from parent(s) to child(ren), or from child(ren) to parent(s) may be excluded from reassessment.
- The established Prop. 13 taxable value is not affected by the transfer
- Exclusion is not automatic; there must be a timely filed claim with the Assessor's Office
- The new owner's taxes are calculated on the established Prop.13 factored value, instead of the current market value when the property is acquired.
- $1 million limit (taxable value) on transfers of non-principal residence property
- No dollar limitation on the original owner's principal residence
- Transfers between legal entities (i.e., corporations, partnerships) that are owned by parents or children do not qualify
The parent-child transfers under Proposition 58 include all types of transfers of title from parents to children or from children to parents. Transfers must occur on or after November 6, 1986, the effective date of the Proposition. They may be in the form of a deed (recorded after November 6, 1986), an inheritance from someone who was deceased after November 6, 1986, a court order dated on or after that date, etc.
Further, this Proposition includes all types of real property owned by the transferor, including all the value of his/her principal place of residence and on the first one million dollars ($1 million) of the enrolled value of all other types of property. A mother and father can combine their exclusion for a limit of $2 million dollars.
Definitions and Terminology specific to Prop 58
Children: Children include the following: sons and daughters, sons-in-law and daughters-in-law, stepchildren, and children adopted under 18.
Gift/Purchase: Transfers such as a gift or purchase between parents and children are excluded with a completed Prop. 58 form.
Principal Residence: Proposition 58 does not require that the parent or child use the transferred property as his or her principal residence. In addition, the $1 million limit does not apply to the transferor's principal residence.
$1 Million Dollar Exclusion: The $1 million exclusion for other property applies for each transferor. Therefore, a mother can transfer $1 million of other property and a father can transfer $1 million of other property for a total combined exclusion of $2 million. These transfers will be coordinated Statewide under the million dollar limit.
Legal Entities: Transfers directly between legal entities owned by parents and children are not entitled to the benefits of this measure.
Trusts: A transfer to or from a trust is treated just as a transfer to or from the trustor personally, provided the trust is revocable.
Date of Death of Decedent: The date of any transfer between parents and their children under a will or intestate succession is the date of a decedent's death, which must be after November 6, 1986.
"Third Party" Defined: A third party is any person or entity that is not a transferee or transferor in the transfer between the parents and children.
"Transfer of the Real Property to a "Third Party": For filing proposes, a transfer of the real property to a third party occurs when all the real property received is transferred to someone other than an original transferee or transferor. Therefore, a transfer may qualify for an exclusion when a partial interest in the property received is transferred to a third party prior to an application being filed.
Current law requires that the claim form be filed within three (3) years after the date of the transfer of real property or prior to the transfer of the real property to a third party, whichever is earlier. However, even if a claim is not made within this filing period, a claim is considered timely if it is filed within anytime prior to or within six (6) months after the mailing date of a Notice of Supplemental Assessment or Notice of Proposed Escape Assessment, whichever is later. For example if a taxpayer received a Notice of Supplemental Assessment for a parent-child transfer dated January 1, 1994, and then received a Notice of Proposed Escape Assessment dated April 1, 1994, the taxpayer would have six (6) months from April 1, 1994 to file a claim with the Assessor.
You may download the form here:
1997 Amendment To Filing Requirements
Effective January 1, 1998, in general, except where the property has already transferred to a third party, a Proposition 58 application will be allowed at any time the claim is filed after the conclusion of the above filing periods. (An exception to this rule is when a Proposition 58 application filing results in an escape or supplemental assessment and a third-party transfer has occurred.)
However, under these provisions, the first year of relief begins the year in which the claim is filed; there will be no refund for previous years. Therefore, the first year's enrolled value would be the base year value as of the year of transfer, factored for inflation plus any additional value which has been enrolled because of subsequent transfers or new construction.
For additional clarification on filing requirements from the Board of Equalization, see Letter to Assessors No. 2013/30.
TIPS ON COMPLETING THE PROP 58 CLAIM FORM (BOE-58-AH)
Section A - Property
- The Assessor's Parcel Number and Recorder's Document Number can be obtained from the cover letter sent with this form. In transfers resulting from a death, the cover letter may reference a pseudo number. E.g. P0001234. Write that number in as a document number.
- The Questions in the last line only apply to transfers involving a death of the former owner. If it doesn't apply, leave blank.
Section B - Transferor(s)
(There is space on the back for more names.)
- The transferor is the person giving interest to the child or parent, the seller, the grantor, the person being removed from the title OR the decedent in transfers resulting from death.
- All questions in this section are directed to the transferor.
- Question No. 2 - The Social Security Number of the transferor is required.
- Question Number 4 is asking if the transferor lived in the property (or still does). Also, if you know of an exemption being claimed on this property, please check the appropriate line.
- Question No. 5 is asking if the transferor is transferring property that they do not live in. If the answer is yes and the transferor has done a parent/child transfer before, please attach a list of addresses of all previous transfers.
- Question No. 6 is asking if the transferor is transferring only a portion of their interest. If yes, list the percent being transferred.
- Question No.7 is asking was the transferor was a joint tenant with someone else. If you don't know, leave blank.
- Question No.8 - If this property is/was in a trust, please list the beneficiaries of the trust.
- Up to two transferors can sign at the bottom on the front page. Please include date signed, mailing address and telephone number.
ALL TRANSFERORS OR THEIR LEGAL REPRESENTATIVES MUST SIGN THE CLAIM FORM
Section C - Transferee(s)
(There is space at the bottom for more names.)
- The transferee(s) is the person receiving interest from the transferor.
- Question 1 - Enter the name(s) of the transferees. You are able to list up to two names on this line. One transferee must sign the certification below question 3.
- Question 2 - List the relationship to the transferor. (son, daughter, mother, father, step-son, step-daughter, step-mother, step-father)
Please read the additional questions for No. 2. If any of the situations listed apply to this transfer, please check the
appropriate box. If not, leave blank.
Please include the date signed, mailing address and daytime telephone number.
ONLY ONE TRANSFEREE OR THEIR LEGAL REPRESENTATIVE MUST SIGN THE CLAIM FORM.