Subject: property taxes
Date: Fri, 23 May
I have lived in my house for over 20 years. My brother and his wife granted their half to me. Nine months later, I received a property tax bill that doubled. It went from $1,700 to over $3,400.
Is there anything that can me done? I remain in the house and no money was exchanged between myself and my brother.
Date: 2 Jun 2003
You were caught by the change of ownership rules in Proposition 13. Gift transfers of an "undivided interest" or tenancy in common can result in a reassessment of the property. This also applies when the interest of a joint tenant is terminated. There are exemptions that may apply for certain transfers, such as to certain partnerships, children, spouses, or revocable trusts. However, there is no exemption for a transfer to a brother or sister. (Revenue and Taxation Code Sections 65 and 62(f).)
If your brother had legal counsel when making the gift, he should have been advised of the consequences of the transfer.
Your brother also should have reported this transfer on a gift tax return.
IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised
that any written tax advice contained on this website was
not written or intended to be used (and cannot be used) by any
taxpayer for the purpose of avoiding penalties that may be
imposed under the U.S. Internal Revenue Code.