Laws, Regulations & Annotations
Property Taxes Law Guide – Revision 2015
Property Tax Rules
Title 18, Public Revenues California Code of Regulations
DIVISION 1. STATE BOARD OF EQUALIZATION—PROPERTY TAX
Chapter 4. Equalization by State Board (370–500)
Article 4. Change in Ownership and New Construction (460–500)
Authority: Section 15606, Government Code.
Reference: Sections 60, 61, 62, 63, 63,1, 65, 65.1 and 67, Revenue and Taxation Code.
(a) GENERAL RULE. The creation, transfer, or termination of a tenancy in common interest is a change in ownership of the undivided interest transferred.
(b) EXCEPTIONS. The following transfers do not constitute a change in ownership:
(1) The transfer is between or among co-owners and results in a change in the method of holding title but does not result in a change in the proportional interests of the co-owners, such as:
(A) a partition,
(B) a transfer from a cotenancy to a joint tenancy, or
(C) a transfer from a cotenancy to a legal entity which results solely in a change in the method of holding title and in which the proportional ownership interests in the property remain the same after the transfer. (Such transferees shall be considered to be the "original co-owners" of the property for purposes of determining whether a change in ownership has occurred upon the subsequent transfers of the ownership interests in the property.)
Example 1: A and B own a parcel of real property as tenants in common each owning a 50 percent interest. They transfer the property to a newly formed corporation each receiving 50 percent of the stock. Such a transfer would not be regarded as a change in ownership.
(2) The transfer is of an undivided interest of less than five percent of the value of the total property and has a value of less than $10,000; provided, however, that transfers of such interests during any one assessment year (the period from January 1 through December 31) shall be accumulated for the purpose of determining the percentage interest and value transferred. When the value of the accumulated interests transferred during any assessment year equals or exceeds five percent of the value of the total property or $10,000, then that percentage of the property represented by the transferred accumulated interests shall be reappraised. For purposes of this subsection, the "accumulated interests transferred" shall not include any transfer of an interest that is otherwise excluded from change in ownership.
Example 2: At the end of the assessment year the value of the accumulated interests transferred equals 3 percent of the value of the total property and the dollar value of these interests is $12,000. There will be a reappraisal of the transferred accumulated interests because their value exceeds $10,000.
Example 3: At the end of the assessment year the value of the accumulated interests transferred equal 7 percent of the value of the total property and the dollar value of these interests is $9,000. There will be a reappraisal of the transferred accumulated interests because they exceed 5 percent of the value of the total property.
(3) The transfer is one to which the interspousal exclusion, pursuant to Revenue and Taxation Code section 63, or the registered domestic partner exclusion, pursuant to Revenue Taxation Code section 62, subdivision (p), applies.
(4) The transfer is one to which the parent-child or grandparent-grandchild exclusion applies, and for which a timely claim has been filed as required by Revenue and Taxation Code section 63.1.
(5) The transfer is one to which the cotenancy exclusion, pursuant to Revenue and Taxation Code section 62.3, applies.
History: Adopted June 29, 1978, effective July 3, 1978.
Amended September 26, 1978, effective October 2, 1978.
Repealed Old Rule and Adopted New Rule August 16, 1979, effective August 22, 1979.
Amended November 13, 1979, effective December 6, 1979.
Amended May 5, 1981, effective August 12, 1981.
Amended March 31, 1982, effective June 10, 1982.
Amended May 11, 1994, effective June 10, 1994. Renumbered, formerly 462(b).
Amended October 9, 1997, effective February 20, 1998.
Amended September 10, 2013, effective, December 24, 2013.