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Thomas McJD
Thomas McJD, Lawyer
Category: Real Estate Law
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Experience:  Real Estate Attorney
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Can you gift a property to a child to keep the property taxes

Resolved Question:

Can you gift a property to a child to keep the property taxes the same? But also have them purchase the house from you?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Thomas McJD replied 1 year ago.

TMcJD :

Hi, I will be happy to assist you, and it is my goal to make you a very satisfied customer! This may take a few minutes, so thanks for your patience.

TMcJD :

Would you be transferring your primary residence? If not, what is the value of the property you would be transferring?

Customer:

No we are currently renting

Customer:

We want to purchase my grandmothers home

TMcJD :

So, it's a transfer/sale from a grandparent to grandchild, not from a parent to child as you noted in your question?

Customer:

correct, sorry I didn't say that right

TMcJD :

Okay, that may change things a bit. Regarding your parent that is the child of your grandparent -- is he/she still alive?

Customer:

Yes- both my mother and grandmother are alive

TMcJD :

Okay, thanks. Unfortunately, transfers, including by sale or gift, between grandparent and grandchild are exempt from reassessment under proposition 193 ONLY IF your parent (who is the child of your grandparent) is deceased at the time of the transfer. Thus, because your mother is still alive, any transfer from your grandparent to you would trigger reassessment for property taxes, which means the taxes could go up (depending on the assessed value at the time of transfer and the current assessment being used for taxes).

TMcJD :

If the transfer was from your grandparent to your mother, then it would not trigger reassessment if the value is $1 million or less. This is allowed under proposition 58

TMcJD :

Here is a link to the information concerning those propositions:

TMcJD :

http://www.boe.ca.gov/proptaxes/faqs/propositions58.htm#1

Customer:

If we did that, could my mom turn around and gift it to us?

TMcJD :

As far as I know, you could complete the transfer in 2 steps to prevent reassessment. However, if that is done, there will be federal gift tax consequences for transfer of any value over $14,000 per person in a given year. Of course, if your mother buys it from her mother and you buy it from your mother, then there would be no "gift" unless you or your mother don't pay market value for the transfer.

TMcJD :

However, since this transaction could have significant property tax consequences, it would be worth your while to run this by a local CA attorney.

Customer:

ok- thats what I thought.....I think that answers my question

TMcJD :

Great. I'm glad I could help. Please let me know if I can help with anything in the future.

TMcJD :

I would also be grateful if you could please leave me a positive rating for my assistance. I cannot receive credit for my work without your positive rating even if you already made a deposit with JustAnswer. Thanks and have a great day!

Thomas McJD, Lawyer
Category: Real Estate Law
Satisfied Customers: 6514
Experience: Real Estate Attorney
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