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- For transfers on or after February 16, 2021, the parent-child exclusion covers only a family home or a family farm. A rental home does not qualify.
- A qualifying family home has to become the child's principal residence, with the homeowners' or disabled veterans' exemption filed within one year.
- Even then, the exclusion stops at the taxable value plus an adjusted amount, $1,044,586 for transfers from February 16, 2025 through February 15, 2027.
- A building that goes to a surviving spouse is not reassessed and needs no claim form. A change in ownership statement is still due within 150 days of the death.
What changed on February 16, 2021?
Proposition 19 rewrote the parent-child and grandparent-grandchild exclusion for transfers on or after that date, and it left only a family farm or a family home eligible. A family home here means a place the parent lived in as a principal residence and the child now makes a principal residence too. For landlords' families, the Board of Equalization's Prop 19 page spells out the result. A rental home moving between parents and children is not covered.
For an apartment building, that settles most of the question. Rental units are not a family home. An heir who moves into one unit still does not live in the others. So when the building passes to the children it is generally reassessed, and the property tax bill is recalculated from a new assessed value.
Why does reassessment matter so much for a rental building?
A reassessment can raise the tax on a building whose rents the law holds down. A parent who bought decades ago may have been paying tax on a low assessed value. After the transfer, the heir pays on a value the Assessor sets from the transfer, while rent rules like the City of Los Angeles Rent Stabilization Ordinance cap increases on covered units. The rents may not keep up.
That gap belongs in the keep-or-sell decision. Before an heir holds the building for its income, the numbers should show what the building earns after the new tax bill is paid. The LA County Assessor sets the new value, and its page on the death of an owner is where that process begins.
Suppose your parent occupied one unit of a duplex or a small building and you plan to move into that unit. Ask the Assessor how the exclusion applies to the rest of the property before you count on it. The rule is written around a family home, and rental units are not one.
How does the family-home exception work?
A home qualifies only if it was the parent's principal residence, it becomes the child's principal residence within one year, and the child files for the homeowners' exemption or the disabled veterans' exemption within one year of the transfer. After that, the exclusion lasts only while at least one eligible child keeps living there as the family home.
A value limit caps it even then. The BOE defines the limit as the property's taxable value at the time of transfer, meaning its factored base year value, plus an adjusted amount it publishes. For transfers from February 16, 2025 through February 15, 2027, that amount is $1,044,586, according to the BOE's announcement of the adjustment. When the market value is above the limit, the difference is added to the taxable value.
| Made-up example | Amount |
|---|---|
| Factored base year value at the transfer | $600,000 |
| Adjusted amount for February 16, 2025 through February 15, 2027 | $1,044,586 |
| Value limit | $1,644,586 |
| Market value at the transfer | $2,000,000 |
| Amount above the limit, added to the taxable value | $355,414 |
| New taxable value | $955,414 |
In that example the home keeps its $600,000 taxable value and takes on only the $355,414 above the limit. Because the BOE adjusts the amount, look up its figure for the date of your own transfer rather than reusing this one.
Which forms are due, and when?
- Change in ownership statement. Revenue and Taxation Code section 480 allows 150 days from the date of death to file form BOE-502-D, the Change in Ownership Statement, Death of Real Property Owner. A trustee files it for property in a trust, and otherwise the person receiving the property files it, with the Assessor of every county in which the decedent owned real property. In a probate, it goes in before or with the inventory and appraisal. Penalties can apply if it is not filed after the Assessor asks for it. The BOE's information sheet on the death of a real property owner covers the details.
- Parent-child claim. To claim the family-home exclusion, file form BOE-19-P, Claim for Reassessment Exclusion for Transfer Between Parent and Child, within three years of the transfer but before any transfer of the property to a third party, according to BOE publication 800-1.
- Exemption. The homeowners' or disabled veterans' exemption is filed within one year of the transfer, as the LA County Assessor's Prop 19 page describes.
Watch the order of events if anyone might sell. BOE-19-P has to be filed before any transfer to a third party, so a sale closes that window for good.
What if the building goes to a surviving spouse?
Then Prop 19 does not come into it yet. Transfers between spouses are excluded from reassessment under Revenue and Taxation Code section 63 and Property Tax Rule 462.220, and the exclusion reaches transfers that take effect when a spouse dies and transfers into a trust for a spouse. The LA County Assessor's page on the inter-spousal exclusion says no claim form is required.
The question comes back later. When the surviving spouse leaves the building to the children, the parent-child rules above apply. Planning around it is work for an estate attorney, and a question about one particular assessment is for the Assessor. Shaya can give the family a current estimate of what the building would sell for, which is the number an attorney will want in front of them.