Change in Ownership - Frequently Asked Questions

  1. Does a "transfer of a present interest" in real property occur only when there is a sale or purchase of a property?
  2. How does a change in ownership affect property taxes?
  3. What constitutes a change in ownership? Are there any exclusions from reassessment?
  4. We've finally paid off our home loan. Is this a cause for reassessment?
  5. My brother and I together own two investment condominiums but we have now decided to hold title to each one separately. If I transfer my 50 percent ownership interest to my brother on one of them and he transfers his 50 percent ownership interest on the other to me, will both properties be reassessed?
  6. I bought a house under a contract of sale but we did not have it recorded. Do I need to file any change of ownership form?
  7. My mom, sister, and I purchased a commercial property as joint tenants. If mom grants her interest to me and my sister, does this transfer constitute a change in ownership?
  8. If I add a friend or sibling on as a joint tenant to my property, would this cause a reappraisal at today's market value? What if I add them as tenants-in-common?
  9. My brother and I purchased a house a number of years ago. We took title as joint tenants and have been living there ever since. If my brother dies, will his share be reassessed?
  10. My domestic partner and I live in a home that I own. May I transfer one-half of my ownership interest in the property to my partner so that we could hold title as tenants-in-common without the transfer being a change in ownership reassessment?
  11. Are changes in leases subject to change in ownership rules?
  12. How do I inform the county assessor that I purchased a property?
  13. What is a Preliminary Change of Ownership Report form and a Change in Ownership Statement?
  14. What are the penalties for not filing a Preliminary Change of Ownership Report or Change of Ownership Statement?
  15. What is the statute of limitations on an escape assessment if I haven't filed a Change in Ownership Statement?
  16. If the owner responds within 90 days of a request to complete a Change of Ownership Statement from the county assessor but not within 90 days from the date of transfer, can a penalty be imposed?
  17. I still have questions about the laws regarding change in ownership. Where can I find more information?




  1. Does a "transfer of a present interest" in real property occur only when there is a sale or purchase of a property?

    No. A transfer can be a sale or purchase, but it also can be a gift or inheritance. Transfers that constitute a change in ownership may occur by any means, including, but not limited to, transfers that are voluntary, involuntary, or occurs by operation of law; transfers by grant, gift, devise, inheritance, trust, contract of sale, addition or deletion of an owner, or property settlement. Payment or consideration for the property is not required.

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  2. How does a change in ownership affect property taxes?

    Each county assessor's office reviews all recorded deeds for that county to determine which properties require reappraisal under the law. The county assessors may also discover changes in ownership through other means, such as taxpayer self-reporting, field inspections, review of building permits and newspapers. Once the county assessor has determined that a change in ownership has occurred, Proposition 13 requires the county assessor to reassess the property to its current fair market value as of the date ownership changed.

    Since property taxes are based on the assessed value of a property at the time of acquisition, a current market value that is higher than the previously assessed Proposition 13 adjusted base year value will increase the property taxes. Conversely, if the current market value is lower than the previously assessed Proposition 13 adjusted base year value, then the property taxes on that property will decrease.

    Only that portion of the property that changes ownership, however, is subject to reappraisal. For example, if 50 percent of the property is transferred, the assessor will reassess only 50 percent of the property at its current fair market value as of the date of the transfer, and deduct 50 percent from any existing Proposition 13 base year value. In most cases, when a person buys a residence, the entire property undergoes a change in ownership and 100 percent of the property is reassessed to its current market value.

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  3. What constitutes a change in ownership? Are there any exclusions from reassessment?

    If a transfer of real property results in the transfer of the present interest and beneficial use of the property, the value of which is substantially equal to the value of the fee interest, then such transfer would constitute a change in ownership unless a statutory exclusion applies. While a transfer of real property may constitute a change in ownership, the legislature has created a number of exclusions so that some types of transfers are excluded, by law, from the definition of change in ownership. Thus, for these types of transfers, the real property will not be reappraised.

    An exclusion occurs when the assessor does not reassess a property because the property or portions of the property are automatically excluded from reassessment or is eligible to be excluded if the owner properly files a claim. The following list covers most changes in ownership that are excluded from reassessment, either automatically or by claim; however, there may be other excludable qualifying transactions not listed here. Thus, you should contact your local assessor or an attorney if you have a specific transaction that you would like to discuss.

    Changes in ownership that require a claim to be filed to avoid reassessment include the following:

    • Transfers of the principal place of residence between parents and their children (there is no limit on the value of the residence) if a completed application is filed timely with the county assessor's office (Proposition 58).
    • Transfers of up to $1 million of real property between parents and their children, other than a principal place of residence, if a completed application is filed timely with the county assessor's office (Proposition 58).
    • Transfers of a principal place of residence from grandparents to their grandchildren, but not vice versa (and the transfer of up to $1 million of other real property from grandparents to their grandchildren) provided that:
      • the transfer occurs on or after March 26, 1996;
      • the grandchild(ren)’s parent (grandparent’s child) died on or before the date of transfer; and
      • a completed application is timely filed with the county assessor's office (Proposition 193).
    • Transfers of the principal residence between two cotenants that occur upon the death of one of the cotenants, provided that:
      • The two cotenants together owned 100 percent of the property as tenants in common or joint tenants.
      • The two cotenants must be owners of record for the one-year period immediately preceding the death of one of the cotenants.
      • The property must have been the principal residence of both cotenants for the one-year period immediately preceding the death of one of the cotenants.
      • The surviving cotenant must obtain a 100 percent interest in the property.
      • The surviving cotenant must sign an affidavit affirming that he or she continuously resided at the residence for the one-year period preceding the decedent cotenant's date of death.
    • The purchase of a replacement dwelling by a person who is 55 years of age or older, where the replacement dwelling will be that person’s principal place of residence and is equal or lesser in value than the original residence. In such cases, the base year value of the previous home may be transferred to the new home so that the new home will not be reassessed to its current fair market value but will be able to retain the old home’s base year value. The original and replacement residences must generally be located in the same county; however, as of May 2008, seven counties allow a transfer of the base year value from the original property located in another county to a replacement dwelling located in that county (Proposition 60/90).
    • The purchase of a replacement property if the original property was taken by governmental action, such as eminent domain or inverse condemnation (Proposition 3).
    • The purchase of a new principal residence by a person who is severely disabled (Proposition 110-same as Propositions 60/90).
    • Transfers of real property between registered domestic partners that occurred between January 1, 2000 and January 1, 2006 (section 62(p) of the Revenue and Taxation Code). County assessors are required to reverse any reassessments that resulted from any transfers of real property between registered domestic partners that occurred during this time period if the taxpayer files a timely claim. However, relief for such a reversal is applied only on a prospective basis. The registered domestic partners will not receive any refunds.

    Changes in ownership that are automatically excluded from reassessment include the following:

    • Transfers of real property between husband and wife, which include transfers in and out of a trust for the benefit of a spouse, the addition of a spouse on a deed, transfers upon the death of a spouse, and transfers pursuant to a divorce settlement or court order (section 63 of the Revenue and Taxation Code; Rule 462.220).
    • Transfers of real property between registered domestic partners that occur on or after January 1, 2006, which include transfers in and out of a trust for the benefit of a partner, the addition of a partner on a deed, transfers upon the death of a partner, and transfers pursuant to a settlement agreement or court order upon termination of the domestic partnership (section 62(p) of the Revenue and Taxation Code).
    • Transactions only to correct the name(s) of the person(s) holding title to real property or transfers of real property for the purpose of perfecting title to the property (for example, a name change upon marriage).
    • Transfers of real property between coowners that result in a change in the method of holding title to the property without changing the proportional interests of the coowners, such as a partition of a tenancy in common.
    • Transfers between an individual or individuals and a legal entity or between legal entities, such as a cotenancy to a partnership, or a partnership to a corporation, that results solely in a change in the method of holding title to the real property and in which proportional ownership interests of the transferors and the transferees, whether represented by stock, partnership interest, or otherwise, in each and every piece of real property transferred, remains the same after the transfer.
    • The creation, assignment, termination, or reconveyance of a lender's security interest in real property or any transfer required for financing purposes only (for example, co-signor).
    • The substitution of a trustee of a trust or mortgage.
    • Transfers that result in the creation of a joint tenancy in which the transferor remains as one of the joint tenants.
    • Transfers of joint tenancy property to return the property to the person who created a joint tenancy (i.e., the original transferor).
    • Transfers of real property to a revocable trust, where the transferor retains the power to revoke the trust or where the trust is created for the benefit of the transferor or the transferor's spouse.
    • Transfers of real property into a trust that may be revoked by the creator/grantor who is also a joint tenant, and which names the other joint tenant(s) as beneficiaries when the creator/grantor dies.
    • Transfers of real property to an irrevocable trust for the benefit of the creator/grantor or the creator/grantor's spouse.

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  4. We've finally paid off our home loan. Is this a cause for reassessment?

    No. A deed of reconveyance is only to officially document the fact that you paid off your loan. This is not a transaction that would cause a change in ownership simply because there is no transfer of beneficial use.

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  5. My brother and I together own two investment condominiums but we have now decided to hold title to each one separately. If I transfer my 50 percent ownership interest to my brother on one of them and he transfers his 50 percent ownership interest on the other to me, will both properties be reassessed?

    Yes. The county assessor will be required to reassess 50 percent of each property to current market value. This will result in 50 percent of each property maintaining its prior base year value and 50 percent of each property receiving a new base year value. The interests cannot be partitioned because the two condominiums are separate appraisal units.

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  6. I bought a house under a contract of sale but we did not have it recorded. Do I need to file any change of ownership form?

    Yes. In those cases where no deed is recorded, California law requires property owners to file a Change of Ownership Statement (COS) whenever real property or locally assessed manufactured homes change ownership. In those cases where a deed or other recorded documents are filed, the deeds and certain other recorded documents must be accompanied by a Preliminary Change of Ownership Report (PCOR) at the time of the recording; otherwise, the taxpayer may file the PCOR at another time, but the county recorder may charge a $20 fee for filing the PCOR without the accompanying documents. If the PCOR is not filed, or is improperly completed, the county assessor may mail you a COS. Failure to return the COS may result in penalties. These forms are used to assist in the appraisal of property and are not open for public inspection.

  7. My mom, sister, and I purchased a commercial property as joint tenants. If mom grants her interest to me and my sister, does this transfer constitute a change in ownership?

    Yes. You and your sister are the sole remaining joint tenants, thus a change in ownership has occurred as to one-third of the property since your mom transferred one-third of her interest to you and your sister. However, this transaction may qualify to be excluded from a change in ownership under Proposition 58 (transfers between parents and their children), provided your mother has not already used the $1 million dollar limit allowed for investment property.

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  8. If I add a friend or sibling on as a joint tenant to my property, would this cause a reappraisal at today's market value? What if I add them as tenants-in-common?

    No. Adding joint tenants does not result in reappraisal so long as you, as the original joint tenant, remain as one of the joint tenants. As a result of this exclusion, you become an "original transferor." Once you no longer have an interest in the property, at that time, the entire property would be reappraised. However, adding someone to title as tenants-in-common is a change in ownership, unless an exclusion applies.

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  9. My brother and I purchased a house a number of years ago. We took title as joint tenants and have been living there ever since. If my brother dies, will his share be reassessed?

    You may qualify for the cotenancy exclusion if you file an affidavit with the county assessor when your brother dies. As long as both you and your brother together own 100 percent of the property and, for the one-year period prior to the date of death, both of you were on title and continuously resided in the property, the surviving cotenant will qualify for the cotenancy exclusion.

  10. My domestic partner and I live in a home that I own. May I transfer one-half of my ownership interest in the property to my partner so that we could hold title as tenants-in-common without the transfer being a change in ownership reassessment?

    Yes. If you are registered with the California Secretary of State, transfers of real property between registered domestic partners are excluded from reassessment.

  11. Are changes in leases subject to change in ownership rules?

    Yes. The following lease transactions are considered changes in ownership:

    • The creation of a leasehold interest in taxable real property for a term of 35 years or more (including written renewal options).*
    • The termination of a leasehold interest in taxable real property (where the property leased returns to the lessor), which had an original term of 35 years or more (including written renewal options).*
    • Any transfer of a leasehold interest having a remaining term of 35 years or more (including written renewal options).*
    • The transfer (sale) of the lessor's interest in taxable real property subject to a lease with a remaining term (including written renewal options) of less than 35 years.*
    • When real property subject to a lease changes ownership (as in 1 through 4 above), the entire property is reappraised, including leasehold and leased fee.*

    * Only that portion of a property subject to such lease or transfer shall be considered to have undergone a change in ownership. For instance, a qualifying lease of one shop in a shopping center requires reappraisal of only that shop.

    Exclusions include:

    • The transfer (sale) of the lessor's interest in taxable real property subject to a lease with a remaining term of 35 years or more (including renewal options).
    • The transfer of a leasehold interest, to other than the lessor, in taxable real property with a remaining term of less than 35 years.
    • The transfer of the lessor’s interest in residential property that is eligible for the homeowners’ exemption on the basis that the lessee owns the dwelling and resides in it as a principal residence.

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  12. How do I inform the county assessor that I purchased a property?

    Section 480 of the Revenue and Taxation Code requires the buyer of any real property subject to local property taxation that has changed ownership to file a change in ownership report according to the following time schedule:

    If the transfer is recorded: At the time of recording
    If the transfer is not recorded or change in ownership report not filed at time of recording: Within 90 days of the date of transfer
    If the change in ownership was the result of a death and there is no probate: Within 150 days of the date of death
    If the change in ownership was the result of a death and the estate is probated: At the same time that the "inventory and appraisal" is filed.

    If the statement is filed at the time of recording, the owner may file a Preliminary Change in Ownership Report (PCOR), BOE 502-A. If a PCOR is not filed at the time of recording, the owner must file a Change in Ownership Statement, BOE-502-AH, within the specified time period.

    These forms and various other change in ownership reporting forms may be available from your county assessor's website, or you may call their office to request that a form be sent to you.

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  13. What is a Preliminary Change of Ownership Report form and a Change in Ownership Statement?

    Ordinarily, when sales or transfers of property are recorded with the county recorder, whoever records the deed also files a Preliminary Change In Ownership Report (PCOR) for the owner. It is a two-page questionnaire requesting information on the property, principals involved in the transfer, type of transfer, purchase price and terms of sale, if applicable, and other such pertinent data.

    The PCOR normally satisfies the change in ownership reporting requirements unless the form is returned incomplete. If at the time of recording the owner chooses not to file a PCOR or if the transfer deed is not recorded, the owner is still obligated to file a Change in Ownership Statement with the county assessor within the prescribed time limits. The recorder may charge an additional $20 recording fee if a PCOR is not filed at the time the transfer document is presented to be recorded.

    The PCOR is to be signed and certified by the filer. The county assessor may also request other information about a deed or other matters related to the transfer after reviewing the PCOR.

    The county assessor will send out a Change of Ownership Statement (COS) to the owner when a Preliminary Change of Ownership Report (PCOR) is either not filed when the transfer is recorded or is filed incomplete. The COS contains the same questions as those in the PCOR. The county assessor also sends this form to owners of unique or specialized-type properties when they change ownership.

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  14. What are the penalties for not filing a Preliminary Change of Ownership Report or Change of Ownership Statement?

    Per section 482 of the Revenue and Taxation Code, if you fail to notify the county assessor of a change in ownership, such failure to report will result in the assessment of penalties and interest and may also result in penalties associated with any escape assessments. The penalty for failure to file a Change in Ownership Statement upon a written request by the assessor is $100 or 10 percent of the new base year value resulting from the transfer, whichever is greater, but such penalty may not exceed $5,000 if the property is eligible for the homeowners' exemption or $20,000 if the property is not eligible for the homeowners' exemption, unless the failure to file was willful.

  15. What is the statute of limitations on an escape assessment if I haven't filed a Change in Ownership Statement?

    Per section 532(b)(2) of the Revenue and Taxation Code, the county assessor must retroactively assess as many as eight prior assessment rolls if the escape assessment was the result of the failure to file a required Change in Ownership Statement. For legal entities, there is no limitation as to the number of years the county assessor may make an escape assessment.

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  16. If the owner responds within 90 days of a request to complete a Change of Ownership Statement from the county assessor but not within 90 days from the date of transfer, can a penalty be imposed?

    No. A penalty is triggered only by the county assessor's request to file the Change of Ownership Statement.

  17. I still have questions about the laws regarding change in ownership. Where can I find more information?

    If you still have questions about changes in ownership, you may call the Board’s Assessment Services Unit at 916-274-3350.

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