http://provisolaw.com Business and Estate Planning Attorneys Wed, 07 Mar 2012 02:04:20 +0000 en hourly 1 http://wordpress.org/?v=3.3.2 http://provisolaw.com/2009/06/property-tax-reassessment-on-transfers/?utm_source=rss&utm_medium=rss&utm_campaign=property-tax-reassessment-on-transfers http://provisolaw.com/2009/06/property-tax-reassessment-on-transfers/#comments Tue, 16 Jun 2009 21:19:15 +0000 Lisa http://provisolaw.com/?p=344 A very important issue to consider in your estate plan is the possible increase in property taxes upon transfer of your home to your beneficiaries.  If you’ve owned your home for a long time in CA, your property taxes are probably significantly lower than they would be if the property value were reassessed as of the date of a change in ownership. For example, if you purchased your home in 2007 for $300,000, the original property tax would be $3,000 a year. The amount that is taxed each year can be increased by up to 2% each year. So the property tax in 2008 would be no more than $3,060. Assume that you now want to sell the home and it is worth $1 million. The new owner would pay property tax on $1 million, or $10,000 the first year—far more than what you were paying.
Fortunately, there are exceptions to this reassessment. If a transfer is made from parent to child or grandparent to grandchild, the property is exempt from reassessment. However, be careful if you leave your property equally to more than one child. If one child does not want the property and sells it to the other sibling who wants to live there, the value of the sold share will be reassessed (there is no exclusion for sibling to sibling transfers).
This is just one of many issues that can be resolved through a comprehensive and individualized estate plan.

]]> http://provisolaw.com/2009/06/property-tax-reassessment-on-transfers/feed/ 1