Legal Question in Real Estate Law in California
Property Reassessment
My Dad had previously gifted his house to my sister and myself. He has recently passed away, and now my sister wants to sell the house. I am thinking about buying her out, but will have to refinance the house in order to pay her off, and if the house gets reassessed due to me dropping her from the title, I may not be able to afford the property tax increase.
My question is: If I do buy her out, and she gets dropped from the title, will the property get reassessed? My sister and myself are the only ones on the title.
Thanks
1 Answer from Attorneys
Re: Property Reassessment
Sibling to sibling transfers of real property are not exempt from reassessment under Prop. 13 and follow-on measures. The half interest you buy (and only that half interest) will be reassessed at current market value. The half interest you received from your parent as a gift was exempt at the time you received it; further, it will not ne reassessed when you buy the other half. So, you'll have the logically absurd by legally dictated situation of paying high taxes on half the house, and low taxes on the other half interest.
Also, your sister would likely have a major capital gains issue. See a tax advisor.