A common question we get is:
“Will property taxes go up when someone dies?”
When a loved one passes away, inheriting real estate in California can trigger unexpected property tax reassessments which can lead to major financial consequences if handled incorrectly.
That question translates directly into:
- Reassessment rules
- Avoiding reassessment
- Eligibility for exclusions
Understanding how reassessment rules work could save you tens of thousands of dollars.
What Happens to Property Taxes When Someone Dies in California?
1. Transfers Between Spouses
Transfers to a surviving spouse are fully excluded from reassessment.
- No increase in property taxes
- The surviving spouse keeps the same tax base
2. Parent → Child Transfers (Limited Protection)
This is where things have changed significantly due to:
Under Proposition 19 (effective Feb 16, 2021):
A child can avoid full reassessment only if ALL are true:
- The property becomes the child’s primary residence
- The parent also used it as a primary residence
- The property value increase is within a certain limit (~$1M exclusion)
If these conditions are met:
- Taxes may increase slightly, but not to full market value
If NOT met (e.g., rental, vacation home):
- The property is fully reassessed at current market value
- Taxes can jump dramatically
When an owner of California real property dies, the county assessor needs to be notified of the owner’s death. This involves filing the Assessor Form titled, “Change in Ownership – Death of Real Property Owner” within 150 days of the real property owner’s death. The form is separate from any title transfer documents that are filed with the Recorder’s Office (think grant deeds/trust transfer deeds). Many people are unaware of the importance of this assessor form. Failure to timely file the form can result in additional property taxes months after the death.
If you have recently lost a loved one who owned real property in California and have questions about property taxes, contact certified specialist attorney David A. Arietta at (925) 472-8000
We can help you navigate these filing requirements and ensure you claim every exclusion you are entitled to.