Revenue and Taxation Code Section 75.12 provides that certain types of new construction can be excluded from supplemental tax assessments. These parcels must be intended for resale, and not rented, leased, occupied or used for any purpose other than as a model home.
Builders of four or fewer single-family residences, and of other classifications of improvements may qualify to be exempted from a supplemental assessment. To qualify, the builder must notify the assessor within 30 days of starting construction. If the builder does not notify the assessor within 30 days of starting construction, a supplemental assessment for the value of the new construction is assessed to the builder upon completion of construction. If the exclusion is granted, a supplemental assessment is not created until the property is sold, occupied, leased or rented.Click here for the Builders’ Inventory Exclusion Notice to the Assessor form.
Builders obtaining five or more single-family residential lots that are intended for construction and resale in a subdivision, will be automatically excluded from a supplemental assessment on new construction if the property they are building will be offered for sale, and:
- it is subdivided into five or more parcels,
- a map describing the parcels has been recorded, and
- the zoning regulations or building permits for the parcels require that single-family residences will be constructed on them.
When property under construction transfers, there would be a supplemental assessment for the change in ownership, including the construction completed as of the date of transfer. The new owner/builder must then apply for any exclusion from supplemental assessment for the subsequent construction if the above conditions are applicable.
If the newly constructed property has qualified for exclusion from supplemental assessment as described above, the owner must notify the assessor within 45 days after the earliest of any of the following:
- The date the property changes ownership by an unrecorded contract of sale.
- The date the property is leased or rented.
- The date the property is occupied or used either by the owner or with the owner’s consent except as a model home or in showing for sale or lease.
The failure by the owner to timely notify the assessor of the earliest of the above events will result in a penalty as provided in Section 482 of the Revenue and Taxation Code.
Proposition 19 repeals and replaces Proposition 193 with a new exclusion for the transfer of a family home, under limited circumstances, between grandparents and grandchildren. The grandparent-grandchild transfer exclusion requires that all the parents of the grandchild, who qualify as children of the grandparents, be deceased as of the date of purchase or transfer. It requires partial reassessment if the market value of the family home, at transfer, exceeds the sum of the existing taxable value plus $1 million. To qualify for the exclusion, the transferee is required to occupy the home and file for a Homeowner’s Exemption within one year of the change in ownership.
Proposition 19 provides for exclusion from reassessment, the transfer of a family farm, in limited circumstances, between grandparents and grandchildren, as described above. It requires partial reassessment if the market value of the family farm, at transfer, exceeds the sum of the existing taxable value plus $1 million. Proposition 19 eliminates the grandparent-grandchild exclusion for any property other than the family home or family farm.
If a government agency acquires your property, you have the right to retain the existing value and transfer it to a replacement property. The replacement property acquired, and an application form must be filed with the Assessor within four (4 years) from the date of acquisition.For more information, contact the Standards Division of the Assessor's Office at (209) 525-6461.