This pamphlet, produced by the Santa Cruz County Assessor explains some
of the various exclusions from reappraisal found in
What is an exclusion?
Under Prop 13 properties can be appraised only when there is a change of ownership or new construction. When either of these events occurs and yet does not trigger a reappraisal it is known as an exclusion.
What's the difference between an exclusion and an exemption?
An exemption allows a portion (or all) of the assessed value of the property to be untaxed. The exclusion simply avoids reappraisal.
Where are these exclusions to be found?
The exclusions are found throughout
What are the exclusions?
The following list shows the most common exclusions and the relevant Revenue and Taxation Code Rules which apply:
b. Correction of the name(s) of the person(s) holding title to the property. Rule 462.001(b)
c. The creation, assignment, or reconveyance of a security interest not coupled with the right to immediate use, occupancy, possession or profits. Rule 462.240 (a) (2)
d. There are a number of Trust situations which are excluded from reappraisal:
1. Trustor-Transferor Beneficiary Trusts. Rule 462.160 (b)(1)
2. Revocable Trusts. Rule 462.160 (b)(2)
3. Trustor Reversion Trusts. Rule 462.160 (b)(3)
4. Interspousal Trusts. Rule 462.160 (b)(4)
5. Proportional Interests. Rule 462.160 (b)(5)
6. Other Trusts. The transfer is from one trust to another and meets the requirements of (1), (2), (3), (4), or (5). Rule 462.160 (b)(6)
e. The creation or transfer of a joint tenancy interest and after such creation or transfer, the transferor(s) is one of the joint tenants. Rule 462.040 (b)(1)
f. A transfer which terminates an original transferor's interest in a joint tenancy and the interest vests in whole or in part in the remaining original transferor(s). Rule 462.040 (b)(2)
g. A transfer between or among co-owners which results in a change in the method of holding title but does not result in a change in the proportional interests of the co-owners. Rule 462.020 (b)(1)(C), Rule 462.040 (b)(4), Rule 462.180 (b)(2).
h. The transfer of bare legal title. Rule 462.240 (a).
i. The transfer of co-owner interest(s) of less than five percent of the value of the total property and less than $10,000 in value; provided, however, that transfers of such interests during any one assessment year (the period from January 1 through December 31) shall be accumulated for the purpose of determining the percentage interest and value transferred. Rule 462.040 (8)
j. The property is subject to a lease of less than 35 years. Rule 462.100 (b)(1)(A)
k. The creation of a life estate when the instrument creating the life estate reserves such estate in the transferor or the transferor's spouse. Rule 462.060 (a)
l. Transfers of corporate stock, partnership shares, or ownership interests in other legal entities are not a change in ownership of the real property of the legal entity. Rule462.180 (c) (The exception to this is when more than 50% of the interest transfers.)
m. The addition or deletion of partners in a continuing partnership.
All of this seems very complicated. How do I find out whether or not a transfer is excluded?
It is very complicated. At the time of transfer the grantee fills out a form for the Assessor entitled Preliminary Change of Ownership Report. You will find most of these exclusions in Part I of that document. We welcome public inquiries related to change of ownership issues.
What about new construction?
There is a Builder's Exclusion. Please refer to our pamphlet: The Builder's Exclusion "Be Sure to File Timely."
Should you have any further questions please contact the Santa Cruz County Assessor at 454-2002.