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主頁 > 理財文章 > 地產投資 > 合法避免地稅重估(英文)  

合法避免地稅重估(英文)

 

Below is the information concerning property tax reassessment.

 

Normally, when one of the co-owners (who are not parents and child) quits claim, a portion of the property has to be reassessed. This would probably cause an increase in property tax. But there are legal ways to avoid reassessment.

 

1.      Tenancy In Common

 

The first situation has to do with co-owners owning the property as tenants in common.

 

For example, A, B and C owns a property together as tenants in common. Now C wants to quit claim so A and B ends up owning the entire property. When this is done, there is normally a one-third change in ownership so it is subject to reassessment, and will result in higher property taxes. But the rules says if either A or B is an “original transferor” then no reassessment is required. Since A, B and C own it as tenants in common, they should first transfer title from A, B and C as tenants in common to A, B and C as joint tenants. This would make A, B and C “original transferors”. Then when C quits claim later reassessment is avoided.

 

To qualify as ‘Original transferors” they must be the original acquirer of the property. In other words, A, B and C cannot be given this property by someone else. They (or at least the person staying on the title) must be the original purchasers.

 

Below is the response I received from BOE confirming the above procedures:

 

This is in response to your e-mail query of April 8, 2004, regarding a particular joint tenancy situation.  In your query you posed the following scenario: If A, B, and C are original joint tenants in a property and C decides to quitclaim to A and B, you asked if this would be considered a change in ownership.

 

If A, B and C acquired the property as joint tenants and C quitclaims to A and B, this would result in a one-third change in ownership because neither A nor B are "original transferors." 

 

To become an original transferor, one must be both a transferor and a transferee.  For example, if A and B purchased the property and then transferred the property to A, B, and C as joint tenants, A and B would become original transferors. Or, if A, B, and C acquired the property and tenants in common and then transferred the property to themselves as joint tenants, then A, B, and C would become original transferors.  Then, if C quit claimed an interest to A and B, this would be excluded from change in ownership.

 

I hope this information is helpful.  If you have any questions, please contact our Real Property Technical Services Unit at (916) 445-4982.

 

Dean R. Kinnee, Chief

Assessment Policy and Standards Division Property and Special Taxes Department California State Board of Equalization

 

  1. Joint Tenancy

 

The second situation has to do with co-owners owning the property as joint tenants.

 

For example, A, B and C owns a property together as joint tenants. Now C wants to quit claim so A and B ends up owning the entire property. To avoid reassessment, again a two step procedure has to be followed. But it is a bit more tricky than the first situation.

 

In order for A, B and C to become “original transferors” they have to transfer ownership to themselves once. But A, B and C as joint tenants cannot transfer to A, B and C as joint tenants because this is the way title is currently held. So A, B and C must find another person to also become a joint tenant. Say this person is D. So A, B and C as joint tenants would first quit claim to A, B, C and D as joint tenants. This would make A, B and C original transferors. Then A, B, C and D would quit claim to A and B. No reassessment is needed.

 

Below is the letter from the BOE confirming the above procedures:

 

You asked whether A, B, and C, who purchased property as joint tenants, would become original transferors if they were to subsequently record a quit claim deed transferring title, again, to A, B, and C as joint tenants.

 

For an original transferor to be created, a change must occur.  Either another person has to be added to title or there must be a change in the method of holding title.  A quit claim deed from A, B, and C as joint tenants to A, B, and C as joint tenants does not change anything.  This deed is a duplicate and simply reaffirms the initial transfer.  Thus, A, B and C do not become original transferors.

 

I hope this information is helpful.  If you have any questions, please contact our Real Property Technical Services Unit at (916) 445-4982.

 

Dean R. Kinnee, Chief

Assessment Policy and Standards Division Property and Special Taxes Department California State Board of Equalization

 

Please note: there should be a few months’ time being the first part and the second part. Try not to do the second quit claim too close to the first quit claim. At least wait 3 months. Best to wait 6 months.