Change in ownership is the legal term for a property transfer that triggers reassessment to current market value in California. Under Prop 13, your assessed value normally increases just 2% per year—but when ownership changes, the property is reassessed at its current market value (usually the purchase price).
This is why California property taxes can jump dramatically when a home sells. A house that was paying taxes on a $200,000 assessed value from 1995 suddenly resets to its $1,200,000 sale price, increasing taxes by 6x overnight.
Certain transfers are excluded from triggering reassessment—like transfers between spouses or (with limitations) from parents to children under Proposition 19.
Understanding change in ownership rules is critical for California homeowners planning transfers or inheritances.
Key facts about change in ownership:
• Triggers full reassessment to current market value
• Creates a new base year value (purchase price)
• Future increases limited to 2%/year from new base
• Some family transfers can preserve low assessment
• Refinancing does NOT trigger reassessment
• Adding/removing spouse does NOT trigger reassessment
Proposition 19 changes (effective 2021):
Parent-to-child transfer exclusions are now limited. Children inheriting property can keep the parent's base value only if they use it as their primary residence, and only up to $1 million over the parent's assessed value. Consult a tax professional for complex situations.
How change in ownership affects taxes:
Before sale (longtime owner):
• Original purchase (1990): $180,000
• Base year value: $180,000
• Current assessed value (after 34 years): ~$360,000
• Annual property taxes: ~$3,600
After sale to new buyer (2024):
• Sale price: $1,400,000
• New base year value: $1,400,000
• New annual property taxes: ~$14,000
The new buyer pays nearly 4x more than the previous owner—for the same house. This is the 'change in ownership' reassessment in action.
Excluded transfers (no reassessment):
• Between spouses (or registered domestic partners)
• From parents to children (up to $1M value, with conditions)
• Certain trust transfers
No. Refinancing your mortgage doesn't trigger reassessment because you're not transferring ownership—you're just changing your loan. Your assessed value continues increasing at its normal 2%/year rate.
Under Proposition 19 (2021), children can inherit their parent's low assessed value if they use the home as their primary residence and the value doesn't exceed the parent's assessed value by more than $1 million. This is more restrictive than previous rules.
Adding or removing a spouse (or registered domestic partner) is an excluded transfer under Prop 13. It won't trigger reassessment. However, transfers to non-spouse family members (like adult children) may trigger reassessment unless exemptions apply.