Legal Question in Real Estate Law in California

Re: Property Tax

In order for the property to be reassessed (potential property tax increase), there needs to a change in title. If the title remains the same, then the property taxes should remain the same. I hope she has a living trust.

Re: Property Tax

The assessment won't change; the 91 year old who moves out will lose the homeowner's exemption, however, and the new occupants probably aren't eligible for one since it is keyed to owner occupancy. However, the impact is relatively small (for most properties) compared with the regular tax bite itself, so I would just notify the tax collector that the property is no longer owner occupied and accept the relatively small tax increase that will result.

Re: Property Tax

I believe the exemption is $7,500 and with a tax rate of 1.25% that means increased taxes of about $95.

The more important matters are has she thought out entirely what the effects will be having her granddaughter living there. If they have a falling out, at age 91 she is not going to want to go through an eviction process. Will the GD claim some type of property interest so that the children of grandma do not inherit what is given to them in the Will? Will the IRS consider this as income as they have ruled before when no rent was paid and they found it to be imputed. Does she want to sell the house and claim the $250,000 exemption or will that still result in capital gains to her so it is better for the house to get a stepped up basis on her death? But will that put her over the $1,000,000 estate tax exemption? Has she set up a Trust or done any estate planning?

She needs to see a very knowledgeable person to discuss all the possible future problems and opportunities.