SB 288: Property taxation: change in ownership: family homes and farms.

The California Constitution limits the amount of ad valorem taxes on real property to 1% of the full cash value of that property, defined as the county assessors valuation of real property as shown on the 197576 tax bill and, thereafter, the appraised value of the real property when purchased, newly constructed, or a change in ownership occurs after the 1975 assessment, subject to an annual inflation adjustment not to exceed 2%.

Pursuant to constitutional authorization, existing property tax law, on and after February 16, 2021, excludes from classification as a change in ownership the purchase or transfer of a family home or family farm, as those terms are defined, of the transferor in the case of a transfer between parents and their children, or between grandparents and their grandchildren if all the parents of those grandchildren are deceased, if the property continues as the family home or family farm of the transferee, as specified. For purposes of the transfer of a family home, that law requires the transfer to be of a principal residence of the transferor and to become the principal residence of the transferee within one year of the transfer. That law also requires the transferee to file for the homeowners or disabled veterans exemption within a year of the transfer, as described.

This bill would provide that, in the event of the death of an eligible transferor, a transfer to an eligible transferee as a result of the death of an eligible transferor by an order entered pursuant to specified existing law, the transfer commencing either of the above-described one-year periods periods described above shall be deemed to occur commence as of the effective date of a courts determination of the final ownership of the property, as specified. effective date of the order, as specified. The bill would require a transferee to notify the assessor of the county in which the property is located of their intention to claim the exclusion, as specified. By expanding the duties of local tax officials, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.

This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.

This bill would take effect immediately as a tax levy.