CHANGE IN OWNERSHIP REPORTING REQUIREMENTS

A change in ownership statement must be filed for each transfer of real property and on the death of the owner. Rev & T C §§480–480.2. The transferee must file a preliminary change of ownership report concurrent with recordation of any document effecting a change in ownership of the property. Rev & T C §§480.3–480.4.

PRACTICE TIP: If the transfer is excluded from reassessment, explain on the preliminary change of ownership report form (using an attachment, if necessary) what transfers are occurring, and why the transfers are excluded from reassessment. Although a claim for refund based on an erroneous change of ownership can always be filed, the property tax must be paid as a condition of filing the claim for refund, and it takes 1 year or longer to obtain a hearing date. Consequently, a preliminary change of ownership report form that clearly states the reasons for the exclusion and convinces the assessor of the basis for the exclusion will be of substantial benefit to the client.

Transfers on Death

The personal representative must file a change in ownership statement with the county recorder or assessor in each county in which the decedent owned real property before or at the time the inventory and appraisal is filed; in all other cases, including a transfer through a trust, the form is to be filed by the trustee or transferee within 150 days of the decedent’s death. Rev & T C §480(b).

PRACTICE TIP: Send a copy of the form, with the original to the assessor, with a self-addressed, stamped envelope, and ask for a date-stamped copy.

The change in ownership statement must be filed in order to file the property tax certification required under Prob C §8800(d).

PRACTICE TIP: Whenever a document is recorded that changes who manages the trust (e.g., a resignation of trustee and acceptance of nomination of successor trustee), no matter how innocuous, use a preliminary change of ownership report form. See Rev & T C §480.4. The recorder usually will insist on identification of the affected real property by assessor’s parcel number and often will require a reference (by instrument number and date) to the recorded deed that places title to the property in the trustee.

Statute of Limitations

The statute of limitations on supplemental assessments is 4 years (6 years for penalty assessments under Rev & T C §504) if a change in ownership statement is filed, or a preliminary change of ownership report is filed under Rev & T C §480.3, and unlimited if a statement or report is not filed. Rev & T C §75.11. The statute of limitations on escape assessments is 4 years if any document evidencing a change of title or ownership is recorded (8 years for penalty assessments under Rev & T C §504), and 8 years for any unrecorded change for which a statement or report was not filed. Rev & T C §532.