Legal Question in Real Estate Law in California

Is she a part of the trust, or is it separate. Have you been making payments with community property assets? It could be determined that she is already an owner. There are ways to make the assessed value reduced, but it would be temporary unless a change of ownership is created.

Mr. Koenen asks some good questions, but I would add that interspousal transfers do not trigger reassesments. Furthermore, unless the trust is entirely your sole and separate property and not community property or quasi-community property, and unless your wife bought it with her sole and separate property, then there would not be an actual sale, only a transmutation of title, again resulting in no reassesment. So what you are proposing would not effect a change of the Prop 13 basis, but might result in very undesireable capital gains basis changes and possibly gift tax. The best you can do is fill out a request for reassessment form from your county assessor. That will result in the property being reassessed to the current value. It would not change the basis for the annual increase limitation, meaning that if the property value rises again faster than the Prop 13 limit, they can reassess to market value in the future, but only up to what it is assessed at now. At that point it will again be subjec to the Prop 13 annual limit.

In sum, if you want to lower your property taxes, you'll need to fill out the county's paperwork and wait in line with everyone else for action. Counties typically are not in a hurry to devote a lot of well-trained personnel to the process of cutting their own revenues when they are short on people in every function from schools to sheriffs to filling potholes.