Legal Entity Ownership Program (LEOP) – Result of Change in Control and/or Change in Ownership

The property that will be subject to reassessment is any "Interest in Real Property" located in California that is owned or leased by the legal entity that has undergone a change in control or change in ownership.  There are two factors that are considered to determine what California real property owned or leased by the legal entity and any of its subsidiaries is subject to reassessment; they are as follows:

1. Whether the acquisition or transfer of ownership interest was a result of a change in control or change in ownership.
   1. If an entity has undergone a change in control, all interest in real property located in California and held by the acquired legal entity and any of its subsidiaries, as of the date of the change in control, is subject to reassessment.
   2. If an entity has undergone a change in ownership as a result of a transfer of cumulatively more than 50% of an original co-owners’ interest, then only the interest in real property located in California that was previously excluded from reassessment under Section 62(a)(2) would be subject to reassessment as of the date of the transfer.
   3. If, however, cumulatively more than 50 percent ownership interests held by an original co-owner has been transferred and, as a result of the transaction, a person or legal entity has also acquired control (more than 50 percent interest) of the entity, all interest in real property located in California and held by acquired legal entity and any of its subsidiaries, as of the date of the change in control is subject to reassessment, not just the real property previously excluded. (See section 64(d) and Property Tax Rule 462.180, subdivision (d)(2).)
2. Whether the transfer meets one of the exclusions from change in ownership.
   1. There are several possible exclusions from reassessment for legal entity transfers where the property of the legal entity would not be subject to reassessment when the change occurred.