Earlier, we explained that California real property reassessment exclusions often protect family members from paying greatly increased property taxes when they buy or acquire property. It’s true! Propositions 58 and 193 protect some properties from reassessments when the transfer or sale happens between a parent and a child or a grandparent and a grandchild.
$1 Million Exclusion
We noted that if the real property isn’t a primary residence, only the first one-million dollars of real property gets excluded from reassessment. Yet, what value of the property gets counted when considering this $1 million exclusion limit?
So, the value of the transferred property counted toward the $1 million exclusion limit generally would be the taxable value on the assessment roll. Of course, some exceptions apply. For example, if the property is a Williamson Act property or a Mills Act property, base it off the factored base year, not the restricted value.
The Mills Act Program
The Mills Act, an economic incentive program in California, helps ensure the restoration and preservation of qualified historic buildings. It’s implemented by local governments.
The Williamson Act Program
The Williamson Act Program acts as a tool for protecting agricultural and open space land from premature urban development. It’s also called the California Land Conservation Act.
So, keep these programs in mind when figuring the value counted toward the $1 million exclusion limit.
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