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California's Preliminary Change of Ownership Report Form and Proposition 13
Each county assessor's office in California reviews all recorded deeds for that county to determine if the property transfer of title or ownership requires reappraisal under the law. The county assessors also looks for reassessment opportunities using field inspections, review of building permits and newspapers. Once the county assessor has determined that a change in ownership has occurred, Proposition 13 allows the county assessor to reassess the property to its current fair market value as of the date ownership changed.
Since property taxes are based on the assessed value of a property at the time of acquisition, a current market value that is higher than the previously assessed Proposition 13 adjusted base year value will increase the property taxes of the new owner.
Some changes in ownership or title are excluded from an increase in property taxes. To assert the exclusion the grantee fills out a form for the county assessor entitled Preliminary Change of Ownership Report (PCOR). Most of the exclusions from change in ownership are found in Part I of that document.
Examples of exclusions from reassessment are:
Transfers into and out of the standard living trust
Transfers of real property between husband and wife
Transfers of real property between registered domestic partners
Transactions to correct the name of a person holding title to real property, for example, a name change upon marriage.
Transfers between individuals and a legal entity such as partnerships, limited liability companies and corporations provided the proportional ownership interests remain the same
Transfers that result in the creation of a joint tenancy provided the transferor remains as one of the joint tenants.
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