Buying or Selling Property? | Orange County Assessor Department (2023)

Buying Real Estate?

  • What Should I Expect Now That I Own Real Estate?
  • Prop. 13 - To Reassess Or Not To Reassess ...
  • What Is A Supplemental Assessment?
  • Property Tax Information And Dates To Remember
  • How Are Taxes Calculated?
  • Adding Or Removing Co-Signer(s)?

Selling Real Estate?

  • You May Be Able To Transfer Your Prop. 13 Value To Your Child(ren) Or Grandchild(ren)
  • You May Be Able To Take Your Prop. 13 Value With You
  • Can You Take Your Exemption With You?
  • We Need Your New Address

Buying Real Estate?

What Should I Expect Now That I Own Real Estate?

New owners may receive any of the following inquiries or notices that relate to their property tax assessment:

  • Change of Ownership Statement (COS)
  • Homeowner's Exemption Application Form
  • Notice of Supplemental Assessment
  • Supplemental Property Tax Bill
  • Annual Secured Property Tax Bill

YouWILL NOTreceive a new annual secured property tax bill until the following September. The new owner is responsible for all applicable property taxes from the date he/she acquires the property. Contact theTax Collectorto determine your tax liability.

top of page

Prop.13 - To Reassess Or Not To Reassess...

In accordance withProp. 13, certain types of ownership changes, including sales, transfers, or inheritances are generally reassessable. A reassessable change in ownership establishes a new base year value for the property that equals the market value of the property at the time of transfer. A reassessable change in ownership will generate aNotice of Supplemental Assessment.

Non-reassessable changes in ownership can include transfers between husband and wife (including those resulting from death or dissolution); security interest transfers (co-signers); and changes in the way title is held (transfer from individual(s) to a family trust). Also, refinancing is not considered a change in ownership as long as the same parties remain on title before and after the refinancing. Propositions adopted by California voters can exclude certain transfers from reassessment and may reduce property tax liability.

top of page

What Is A Notice Of Supplemental Assessment?

A notice of supplemental assessment typically represents a change (increase or decrease) in taxable value. If the market value of property is different from the previous owner's taxable value, the new owner will receive aNotice of Supplemental Assessmentand a supplemental tax bill or refund. If the market value of the property is higher than the previous owner's taxable value, the new owner will receive a supplemental bill. If the market value of the property is lower than the previous owner's taxable value, the new owner will receive a supplemental refund. It will take approximately 2-3 months to receive this refund from theTax Collector.

Usually supplemental taxes are not collected in escrow. Taxes collected in escrow are based on the previous owner's taxable value. Notices of supplemental assessment and supplemental tax bills are mailed several months after escrow closes. Supplemental assessments are pro-rated from the date of transfer to the end of the tax year (June 30th).

Changes in ownership that occur between January 1 and May 31 are subject to two supplemental assessments because of the State's property tax calendar. Supplemental assessments are typically paid by the new owner directly and are not included in impound accounts. However, you may want to call your lender directly to ask if there are sufficient funds in your impound account to pay for the supplemental assessment. Supplemental property tax bills are mailed within 2 weeks of the Notice of Supplemental Assessment. Due dates for supplemental taxes can vary. Please read the tax bill carefully, or contact theTax Collectorfor more information.

top of page

Property Tax Information And Dates To Remember

The Assessor mails real estate owners an annual notice in July reflecting the property's taxable value. Owners canAppeal an Assessmentbetween July 2 and November 30, 2015if their property's market value on January 1 was lower than the taxable value on the notice. Annual secured property tax bills are mailed by theTax Collectorin September.

Secured property taxes can be paid in two installments. The first installment is due November 1 and delinquent December 10. The second installment is due February 1 and delinquent April 10. OtherDates to Remember.

top of page

How Are Property Taxes Calculated?

The taxable value of real estate is the basis of secured property taxes. Property taxes are calculated by multiplying the property's taxable value by the tax rate for the area where the property is located.

For example:

$250,000 Taxable Value X 1.15% Tax Rate = $2,875 Property Taxes

Tax rates include a 1% basic levy plus any bonded indebtedness, special assessments or Mello-Roos assessments that apply to a specific tax rate. Tax rates can vary significantly from one area to another.

top of page

Adding Or Removing Co-Signer(s)

Whenever a reassessable change of ownership occurs, Proposition 13 requires the Assessor to revalue property for tax purposes. Certain changes of ownership are excluded from reassessment, including changes that add or remove party(ies) from title who have no beneficial interest in the property. This is called a security interest transfer. The most common example of a security interest transfer is adding or removing co-signer(s) from title.

To avoid reassessment in this situation, you are required to:

  • Complete aSecurity Interest Affidavitform
  • Provide evidence of an agreement between the parties (see below)
  • Provide supporting evidence (see below)
  • Send the affidavit and copies to our office

Acceptable evidence of an agreement between the parties is:

A copy of the written agreement between the parties to reconvey the property upon payment of the debt.

Acceptable supporting evidence is:

  • A copy of the letter from the mortgage loan company requiring a cosigner(s) in order to approve the loananda mortgage statement covering the time period when the parties involved were on title together.
  • A copy of the appropriate income tax return schedule indicating the mortgage interest paid or the depreciation claimedanda mortgage statement covering the time period when the parties involved were on title together.

A signed Security Interest Affidavit and other required information should be mailed to our office. For your convenience our address is included on the form. If you have any questions, please call (714) 834-2727.

top of page

Selling Real Estate?

You May Be Able To Transfer Your Prop. 13 Value To Your Child(ren) Or Grandchild(ren)

Parent-Child Transfer

Proposition 19 allows a parent(s) to transfer his/her principal residence, and up to $1 million other real property, to his/her children without reassessment. The million dollar limit refers to assessed value, not market value.

Grandparent-Grandchild Transfer

Proposition 19 allows a grandparent(s) to transfer up to $1 million of property to his/her grandchildren without reassessment, if both parents are deceased.

top of page

You May Be Able To Take Your Prop. 13 Value With You

Age 55 And Older

Proposition 19 allows a property owner who is at least 55 years of age to transfer his/her Prop. 13 value to a qualified replacement property. An owner cannot transfer his/her base year value more than once.

Severely And Permanently Disabled

Proposition 19 allows a property owner who is severely and permanently disabled to transfer his/her Prop. 13 value to a qualified replacement property.

Substantially Damaged Or Destroyed Property

Proposition 50 allows a property owner to transfer his/her Prop. 13 value to a replacement property if his/her property was substantially damaged or destroyed by a Governor-declared disaster.

Contaminated Property

Proposition 1 allows a property owner to transfer his/her Prop. 13 value to a replacement property if his/her property is deemed contaminated by a state or federal agency. Residential property must be deemed uninhabitable due to environmental contamination, and non-residential property must be deemed unusable due to environmental contamination. Other restrictions apply.

Property Taken By Government Action - Eminent Domain

Property owners may be able to transfer their Prop. 13 factored base year value of real property taken by government action to a comparable replacement property located anywhere in California, if certain conditions are met. Value limits and other requirements apply.

top of page

Can You Take Your Exemption With You?

No. You will need to reapply for an exemption on your new property. You should notify theAssessor Departmentto cancel any exemptions you may have on the property you sold. Duplication of exemptions may result in additional tax liability.

top of page

We Need Your New Address

Occasionally assessments for which you are responsible are mailed after you have sold the property. Avoid unexpected penalties, interest and tax liens that show up on your credit report by sending aChange of Address Notice.


How many times can you transfer your property tax base in California? ›

An eligible homeowner may transfer the taxable value of their home to a replacement property anywhere within California up to three times. Filing a form is required and the transfer must meet certain conditions; more information and forms are provided below. This provision applies to transfers starting April 1, 2021.

How does Prop 13 work when you sell your house? ›

Prop. 13 sets a property's base-year value to what it was in 1975 or when it last changed ownership. Then it allows for annual property tax increases of no more than 2% until it changes hands again. In most cases, the portion that's transferred is reappraised to the full current market value.

What is the over 55 home sale exemption in California? ›

What Was the Over-55 Home Sale Exemption? The over-55 home sale exemption was a tax law that provided homeowners over age 55 with a one-time capital gains exclusion. Individuals who met the requirements could exclude up to $125,000 of capital gains on the sale of their personal residences.

What is the prop 13 over 55? ›

Transferring a Principal Residence Value within a County​​ ​

Property owners of at least 55 years of age may transfer the base year value of their principal residence to a replacement principal residence. The replacement must be of equal or lesser current market value and located within the same county.

How long do you have to buy another house to avoid capital gains California? ›

The two years don't need to be consecutive, but house-flippers should beware. If you sell a house that you didn't live in for at least two years, the gains can be taxable.

At what age do seniors stop paying property taxes in California? ›

If you are age 55 or older, you may have a significant equity in your home. California provides a special homestead exemption for seniors age 65 and over, people who are disabled, and people age 55 and over with low incomes.

Can my parents sell me their house for $1? ›

Giving someone a house as a gift — or selling it to them for $1 — is legally equivalent to selling it to them at fair market value. The home is now the property of the giftee and they may do with it as they wish.

What is the loophole in California Prop 19? ›

19 would narrow California's property tax inheritance loophole, which offers Californians who inherit certain properties a significant tax break by allowing them to pay property taxes based on the property's value when it was originally purchased rather than its value upon inheritance.

How can I avoid property reassessment in California? ›

So long as the individuals and the legal entity have the same proportional ownership interests, the real property will not be reassessed when transferred to or from the entity or the individual. A and B can transfer property owned by them 50/50 to an LLC owned by them 50/50 without reassessment.

Does an 80 year old have to pay capital gains tax? ›

The Bottom Line. The IRS allows no specific tax exemptions for senior citizens, either when it comes to income or capital gains. The closest you can come is a back-end tax-advantaged retirement account like a Roth IRA which allows you to withdraw money without paying taxes.

How to avoid capital gains tax when selling a house in California? ›

You do not have to report the sale of your home if all of the following apply:
  1. Your gain from the sale was less than $250,000.
  2. You have not used the exclusion in the last 2 years.
  3. You owned and occupied the home for at least 2 years.
Nov 22, 2022

What is the 6 year rule for capital gains tax? ›

Here's how it works: Taxpayers can claim a full capital gains tax exemption for their principal place of residence (PPOR). They also can claim this exemption for up to six years if they moved out of their PPOR and then rented it out.

Does Prop 13 affect homeowners? ›

Proposition 13, adopted by California voters in 1978, mandates a property tax rate of one percent, requires that properties be assessed at market value at the time of sale, and allows assessments to rise by no more than 2 percent per year until the next sale.

What is Proposition 13 for dummies? ›

About Proposition 13

For many, Proposition 13 was a welcome relief by freezing the property tax base of their homes and thereby limiting annual increases in property taxes. Proposition 13 allows a transfer of primary resident between parent and child without reassessing the tax base of the home.

Can Prop 13 be passed on to heirs? ›

Under Prop 19, the only Prop 13 tax base that can be transferred to your children is that of your principal residence to your child—and then your child themselves must live on the property as their principal residence.

What is the 2 out of 5 rule? ›

The 2-out-of-five-year rule states that you must have both owned and lived in your home for a minimum of two out of the last five years before the date of sale. However, these two years don't have to be consecutive, and you don't have to live there on the date of the sale.

Do seniors get a property tax break in California? ›

The State of California offers three property tax relief programs for senior citizens. These programs can provide tax relief for low-income senior citizens who may be able to delay paying property taxes until a later date, and/or transfer assessed value from a prior home to a new one.

How much profit can I make on my house without paying taxes? ›

Key Takeaways. You can sell your primary residence and be exempt from capital gains taxes on the first $250,000 if you are single and $500,000 if married filing jointly.

What is low income for seniors in CA? ›

Seniors in California are considered low-income if they make less than 50% of their area's median income. For instance, Los Angeles County's median income is $64,500, so a single-person household would be considered low-income if they made less than $32,250 a year.

Will County property tax breaks for seniors? ›

The Senior Citizens Real Estate Tax Deferral Program provides tax relief for qualified senior citizens by allowing them to defer all or part of their property tax and special assessment payments on their principal residences.

How does Prop 19 work for seniors? ›

Prop 19 allows seniors 55 and older to move anywhere in California, up to three times, and keep their property tax basis.

Can my parents sell me their house for less than it's worth? ›

You can sell a property for below market value to a family member, or anyone for that matter. However, you need to do so carefully. Under current tax law, the difference between the fair market value and the purchase price becomes part of your gift exclusion.

How do I avoid inheritance tax on my parents house? ›

5 Ways to Avoid Paying Taxes on Inherited Property
  1. Sell the Inherited Property as Soon as Possible. ...
  2. Turn the Inherited Home into a Rental Property. ...
  3. Use the Inherited Property as a Primary Residence. ...
  4. 1031 Exchange. ...
  5. Disclaim the Inheritance.

Can my parents gift me a house without tax implications? ›

Adding a family member to the deed as a joint owner for no consideration is considered a gift of 50% of the property's fair market value for tax purposes. If the value of the gift exceeds the annual exclusion limit ($16,000 for 2022) the donor will need to file a gift tax return (via Form 709) to report the transfer.

What are CA Prop 13 rules? ›

Under Prop 13, all real property has established base year values, a restricted rate of increase on assessments of no greater than 2% each year, and a limit on property taxes to 1% of the assessed value (plus additional voter-approved taxes).

What is the two year rule for Prop 19? ›

Proposition 19 is effective on and after April 1, 2021, and requires that a replacement home be purchased or newly constructed within two years of the sale of the original home in its damaged condition.

What does Prop 19 mean for homeowners? ›

Allows transfers of a family home or family farm between parents and their children without causing a change in ownership for property tax purposes. It is an exclusion from change in ownership.

Can a parent gift a house to a child in California? ›

A transfer of property can occur by purchase or gift; it can also occur through a trust. For example, if a parent's property is put into a trust where upon the death of the parent, the children are the beneficiaries of the trust, a transfer occurs as of the date of death.

How do I argue against property value in California? ›

The assessment appeal process provides for the “equalization,” or the fairness of the assessment, of a property's value. You must file an Assessment Appeal Application, form BOE-305-AH, obtained from the clerk of the board of the county where your property is located.

Will my property taxes go up if I remodel California? ›

New construction is generally assessable and may increase the taxable value of a property. The impact on a property tax assessment varies depending on the work being performed. Upon completion of the new construction, the assessor determines its fair market value and a base year value is established.

What age does capital gains stop? ›

The capital gains tax over 65 is a tax that applies to taxable capital gains realized by individuals over the age of 65. The tax rate is 0% for long-term capital gains on assets held for more than one year and 15% for short-term capital gains on assets held for less than one year.

What is capital gains tax on 200000? ›

= $
Single TaxpayerMarried Filing JointlyCapital Gain Tax Rate
$0 – $44,625$0 – $89,2500%
$44,626 – $200,000$89,251 – $250,00015%
$200,001 – $492,300$250,001 – $553,85015%
Jan 11, 2023

At what age do you not pay capital gain tax? ›

However, the passing of the Taxpayer Relief Act of 1997 abolished that exemption. Although you must now pay capital gains tax when selling investment properties, the over-55 home sale exemption has been replaced by a home sale exemption that can benefit taxpayers of any age.

How much is capital gains tax in California 2023? ›

State Capital Gains Tax Rates
RankStateRates 2023
2New Jersey *10.75%
2Washington D.C.10.75%
4Oregon *9.90%
47 more rows

How much taxes do I have to pay when I sell my house in California? ›

On the state level, California's Franchise Tax Board (FTB) taxes all capital gains as regular income. Depending on your tax bracket, the tax can be anywhere from 1% to 13.3%. On the federal level, gains can either be considered short-term or long-term.

Is there a one time capital gains exemption in California? ›

If the gain is less than $250,000, an individual will not have to pay capital gains tax, and the same is true for sales less than $500,000 for married couples. This exemption only applies to home sales where it was your primary residence, not investment properties or second homes.

How do I avoid capital gains tax completely? ›

9 Ways to Avoid Capital Gains Taxes on Stocks
  1. Invest for the Long Term. ...
  2. Contribute to Your Retirement Accounts. ...
  3. Pick Your Cost Basis. ...
  4. Lower Your Tax Bracket. ...
  5. Harvest Losses to Offset Gains. ...
  6. Move to a Tax-Friendly State. ...
  7. Donate Stock to Charity. ...
  8. Invest in an Opportunity Zone.
Apr 20, 2023

How many times can you avoid capital gains tax? ›

If you have owned and occupied your property for at least 2 of the last 5 years, you can avoid paying capital gains taxes on the first $250,000 for single-filers and $500,000 for married people filing jointly.

What should I do with large lump sum of money after sale of house? ›

Where Is the Best Place To Put Your Money After Selling a House?
  1. Put It in a Savings Account. ...
  2. Pay Down Debt. ...
  3. Increase Your Stock Portfolio. ...
  4. Invest in Real Estate. ...
  5. Supplement Your Retirement with Annuities. ...
  6. Acquire Permanent Life Insurance. ...
  7. Purchase Long-Term Care Insurance.

How much can you inherit without paying taxes in California? ›

How much money can you inherit before you have to pay taxes on it in California? California does not have an estate tax or an inheritance tax. If an estate is worth more than $12.06 million dollars for single individuals and $24.12 million dollars for married couples in 2022.

Is California property tax based on purchase price? ›

California real property taxes are based on a real property's purchase price. For instance, if you buy a real property in California, the assessed value is equal to the purchase price. The assessed value of the real property can rise with inflation every year, which is the change in the California Consumer Price Index.

What does Proposition 13 require property taxes to be assessed at in California? ›

Under Proposition 13, the property tax rate is fixed at 1% of assessed value plus any assessment bond approved by popular vote.

What does Prop 15 mean? ›

Proposition 15 guarantees that all school districts will receive at least $100 more per student regardless of their LCFF or basic aid status. Revenue projections for each district have been calculated based on 2019–2020 enrollments and have been identified by School Services of California (as published by EdSource).

Who is eligible for Prop 13? ›

Prop 13 insulates homeowners who are older, retired and living on fixed incomes from payment shock when property values increase dramatically in a short period of time. Thus, Prop 13 allows them to remain in their home throughout their retirement, as they can plan for predictable annual property tax increases.

What are exceptions to Prop 13? ›

Transfers of a principal residence from a parent to a child or from a child to a parent are exempt from a reassessment under Prop 13. Transfers of additional real property up to $1 million in assessed value are also exempt from a reassessment.

How many times can you use Prop 19? ›

The transfer of taxable value can be filed up to three times by a property owner over their lifetime.

What is the Prop 19 property tax limit for transferring? ›

There is a limit to the value that can be excluded for a family home or each legal parcel of a family farm. The value limit is equal to the property's taxable value (factored base year value) at time of transfer plus $1 million. If the market value exceeds this limit, the difference is added to the taxable value.

What is the transfer tax law in California? ›

It depends on the location of the property. The County Transfer Tax is a standard of $1.10 per $1,000 of the sales price throughout the State. However, there are certain cities that also collect their own City Transfer Tax and those differ.

How often can property taxes be raised in California? ›

The assessed value of a property is limited to an increase no greater than 2% each year unless a change in ownership or new construction occurs. The 2% increase is originally applied to the base year value, and is thus referred to as the factored base year value.

How to avoid property tax reassessment California Prop 19? ›

ACTION TO CONSIDER: To avoid property tax reassessment, do not transfer real property from individuals to a legal entity unless the individuals have the same proportionate interest in the legal entity as they did in the real property.

How do I avoid property tax reassessment in California? ›

Using Special LLCs to Avoid Property Tax Reassessment

Each situation is different, however, in general, we use a series of LLCs to systematically transfer the property to your children (or other beneficiaries) over a period of time. Each transaction avoids these detailed reassessment rules.

What is the age 55 property tax rule in California? ›

Owner must be at least 55 years of age. Both original and replacement properties must be utilized as a principal residence. Replacement residence must be purchased or newly constructed within two years of the sale of the original property. Location of replacement home can be anywhere in California.

How do I transfer property to a family member tax free California? ›

Complete form BOE-19-P, Claim for Reassessment Exclusion for Transfer Between Parent and Child Occurring On or After February 16, 2021. Obtain the claim form from the County Assessor's office where the property is located.

How much taxes do you pay when you sell a house in California? ›

On the state level, California's Franchise Tax Board (FTB) taxes all capital gains as regular income. Depending on your tax bracket, the tax can be anywhere from 1% to 13.3%. On the federal level, gains can either be considered short-term or long-term.

Does buyer or seller pay transfer tax in California? ›

In California, the seller traditionally pays the transfer tax. Depending on local market conditions, transfer taxes can become a negotiating point during closing. For instance, in a strong seller's market, the seller may have multiple offers and will likely find a buyer who agrees to pay the transfer tax.

How to avoid transfer tax in ca? ›

Documentary Transfer Tax Exemptions
  1. Conveyance Given for No Value. ...
  2. Conveyance to Establish Sole and Separate Property of a Spouse. ...
  3. Conveyance to Confirm a Community Property Interest when property was purchased with Community Property Funds. ...
  4. Conveyances transferring interests into or out of a Living Trust.

How can I lower my property taxes in California? ›

If you own a home and occupy it as your principal place of residence, you may apply for a Homeowners' Exemption. This exemption will reduce your annual assessed value by $7,000. Exemption becomes ineligible for the exemption. Homeowners' Exemptions are not automatically transferred between properties.

What is most likely cause of an increase in property tax? ›

  1. Home improvements. ...
  2. Revaluation. ...
  3. Nearby home sales. ...
  4. New schools. ...
  5. Higher government budgets.
Feb 26, 2018


Top Articles
Latest Posts
Article information

Author: Rev. Leonie Wyman

Last Updated: 05/30/2023

Views: 5463

Rating: 4.9 / 5 (79 voted)

Reviews: 86% of readers found this page helpful

Author information

Name: Rev. Leonie Wyman

Birthday: 1993-07-01

Address: Suite 763 6272 Lang Bypass, New Xochitlport, VT 72704-3308

Phone: +22014484519944

Job: Banking Officer

Hobby: Sailing, Gaming, Basketball, Calligraphy, Mycology, Astronomy, Juggling

Introduction: My name is Rev. Leonie Wyman, I am a colorful, tasty, splendid, fair, witty, gorgeous, splendid person who loves writing and wants to share my knowledge and understanding with you.