California Code of Regulations › Title 18 - Public Revenues › Division 1 - State Board of Equalization-Property Tax (California Department of Tax and Fee Administration - Timber Yield Tax, See Chapter 11) › Chapter 4 - Equalization by State Board › Article 4 - Change in Ownership and New Construction › Section 462.540 - Change in Ownership - Base Year Value Transfers

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
GENERAL
. Beginning on and
				  after April 1, 2021, any person who is over the age of 55 years, or severely
				  and permanently disabled, or a victim of a wildfire or natural disaster may
				  transfer the factored base year value of their primary residence to a
				  replacement primary residence located anywhere in this state, regardless of the
				  location or value of the replacement primary residence, if all of the following
				  conditions are met:
(1) The person sells the
				  original primary residence within two years of the purchase or new construction
				  of the replacement primary residence. Either the sale of the original primary
				  residence or the purchase or new construction of the replacement primary
				  residence, but not both, may occur before April 1, 2021.
(2) The real property is the person's
				  original primary residence either at the time of its sale, or at the time when
				  the original primary residence was substantially damaged or destroyed by
				  misfortune or calamity, or at the time the person became a victim of a wildfire
				  or natural disaster, or within two years of the purchase or new construction of
				  the replacement primary residence.
(3) The original primary residence undergoes
				  a change in ownership that either:
(A)
				  Subjects that property to reappraisal at its current full cash value;
				  or
(B) Results in a base year value
				  determined in accordance with this section, or sections
				  69
				  or
				  69.3
				  of the Revenue and Taxation Code, because the property qualifies as a
				  replacement primary residence, dwelling, or property under any of those
				  provisions.
Example 1: A brother and sister are equal co-owners of a
					 primary residence. The sister sells her 50 percent interest to her brother and
					 purchases a separate residence. Even if the sister is otherwise qualified, she
					 is ineligible to transfer her portion of the base year value of the primary
					 residence to her new residence, since the original primary residence did not
					 undergo a 100 percent change in ownership that resulted in a reappraisal of the
					 property at its current full cash value.
(4) The replacement primary residence is
				  purchased or newly constructed within two years of the sale of the original
				  primary residence. The land on which a building, structure, or other shelter
				  constituting a place of abode is newly constructed need not be purchased within
				  two years of the sale of the original primary residence.
Example 2: Owner sells their original primary residence for
					 $515,000. Owner and two other persons together purchase a replacement primary
					 residence for $500,000. If Owner is otherwise qualified, the factored base year
					 value of their original primary residence can be transferred to the replacement
					 primary residence. Even though Owner owns only a one-third interest in the
					 replacement primary residence, 100 percent of the original primary residence
					 changed ownership and 100 percent of the replacement primary residence
					 underwent a change in ownership within two years. Only Owner is considered a
					 claimant, even if the other co-owners will benefit from the Owner's base year
					 value transfer.
Example 3: Owner is the sole owner of a primary residence,
					 which has a market value of $500,000. Co-owner purchases a 50 percent interest
					 in Owner's property for $250,000. Co-owner sold their original primary
					 residence for $200,000 and meets all other requirements. Co-owner may not
					 transfer the base year value of their original primary residence to their 50
					 percent interest in Owner's primary residence, since Owner's primary residence
					 did not undergo a 100 percent change in ownership.
(A) If the replacement primary residence is,
				  in part, purchased and, in part, newly constructed, the date the "replacement
				  primary residence is purchased or newly constructed" is the date of purchase or
				  the date of completion of new construction, whichever is later.
(B) The factored base year value of the
				  original primary residence shall not be transferred to the replacement primary
				  residence until the original primary residence is sold.
Example 4: Owner sells their original primary residence on
					 February 1, 2021. Owner purchased a replacement primary residence on January
					 10, 2023. Subject to all other conditions and requirements of this section,
					 Owner may transfer the base year value of their original primary residence to
					 their replacement primary residence as of January 10, 2023, since the
					 replacement primary residence was purchased within two years of the sale of the
					 original primary residence.
Example 5: Owner purchased a replacement primary residence
					 on March 10, 2020 and sells their original primary residence on May 5, 2021.
					 Subject to all the other conditions and requirements of this section, Owner may
					 transfer the base year value of their original primary residence to their
					 replacement primary residence as of May 5, 2021, since the replacement primary
					 residence was purchased within two years of the sale of the original primary
					 residence.
(5)
				  The person seeking to transfer the factored base year value of their original
				  primary residence pursuant to this section shall file a claim form, in
				  accordance with subdivision (d), with the assessor of the county in which the
				  replacement primary residence is located.
(6) At the time the claim is filed, the
				  purchased or newly constructed dwelling qualifies as the person's replacement
				  primary residence.
(7) The person
				  has not previously been granted, as a claimant, the property tax relief
				  provided by this section more than two previous times. This paragraph shall not
				  apply to claimants that are victims of wildfires or natural disasters.
Example 6: Husband and wife own an original primary
					 residence as community property. Husband has been granted the relief provided
					 by this section three times previously. Wife has never been granted such
					 relief. Subject to all other conditions and requirements of this section,
					 Husband and Wife may sell their original primary residence and transfer its
					 factored base year value to a purchased or newly constructed replacement
					 primary residence if Wife files a claim for exclusion, since Wife has not used
					 the exclusion more than two previous times.