The answer to this critical question is is bad news and overly harsh – The official answer, detailed below, is that the one (1) year deadline to move into the property is firm, with no exceptions. While you can file the claim for Homeowners’ Exemption late, you will only get the ‘benefits’ thereafter, no refunds of prior taxes paid. There is a three (3) year filing requirement for the Claim for Reassessment Exclusion Under Prop 19, and likewise, you will only get prospective relief if filed thereafter.
While earlier, the BOE used its “Emergency Powers” to enact a common sense answer to this question, allowing additional time to file a claim for Homeowners’ Exemption, with caveats, that power has been overruled.
It would appear that while they are allowing late filing of the FORMS (with prospective relief from their respective deadlines), the requirement to actually move into the property within a year IS a firm deadline. I.e. you can move into the property within a year, and be late on the homeowner’s exemption (but with benefits running from the date of filing, no refunds for the increase prior to the filing); but you can NOT be late moving into the property. So, that one year deadline to move in looks like it is going to remain the law for now. Here are some recent BOE letters on the topic:
https://www.boe.ca.gov/proptaxes/pdf/lta22026.pdf
https://www.boe.ca.gov/proptaxes/pdf/lta22035.pdf
https://www.boe.ca.gov/proptaxes/pdf/lta22037.pdf
History and Current Status:
————–
Official Answer (Pre “Emergency Answer”)
On February 24, 2022, the California Board of Equalization clarified yet another outstanding question on California’s New Proposition 19 (aka California’s new “death tax”), namely, what happens if you do not file the claim for Homeowners’ Exemption within one year???
As noted in other articles, see here detailed article(s) on Prop 19, there are several new requirements for intergenerational transfers to maintain the Prop 13 base value due to Prop 19’s changes in former Prop 58 and 193, namely, that the child (or parent) obtaining the property must move in and claim a Homeowners’ Exemption within one year.
As feared, the BOE initially took a firm stance in accordance with the text of the new law, and formally stated that there are NO EXCEPTIONS to the one (1) year filing requirement. To confirm, this means the claim for a Homeowners’ Exemption MUST be filed within ONE YEAR from the date of the transfer, which, if the transfer is as result of a death and inheritance, that date runs from the date of death.
The BOE’s Letter to Assessors, “Implementation of Proposition 19 Intergenerational Transfer Exclusion,” dated February 24, 2022, states, “…the transferee must file for the homeowners’ or disabled veterans’ exemption within one year of the date of purchase or transfer between parent and child or grandparent and grandchild. There are no exceptions to this one-year filing period.” (BOE’s Letter to Assessors, “Implementation of Proposition 19 Intergenerational Transfer Exclusion,” dated February 24, 2022 [original emphasis], available here: https://www.boe.ca.gov/proptaxes/pdf/lta22012.pdf.)
While there IS additional time to file the actual Prop 19 exclusion form (discussed below), it would appear to be a firm one year deadline to file the Homeowners’ Exemption form with your respective county. That’s one year from the date of the transfer, which, if the transfer is as result of a death and inheritance, that date runs from the date of death! This is generally a straightforward one page form simply stating, under penalty of perjury, that you reside in the home as your primary residence.
This is, frankly, a preposterous position and deadline, especially when some counties (such as Orange County) do not make this form readily available online. Indeed, in Orange County, you have to wait for the assessor to send the form and/or expressly call in and request one mailed to you (they will not email it or make it available online). Why on earth the form is not available online in 2022 is an utter mystery and could easily lend to claims of unfair dealing by some county assessors. The Orange County Assessor’s Office states the following on their website, “Homeowners’ Exemption applications are not available on-line. The Assessor sends an application to every new homeowner pre-filled with information that identifies the property and the sales transaction.” Yet, this takes them significant time, jeopardizing many claims for the exemption.
If your county does not make the form available online, you should call them immediately to request a copy of the form and let your elected representatives know your concerns.
Updated Official Answer (“Emergency Answer”)
However, as noted above, as of April 1, 2022, the BOE has used its “Emergency Powers” to enact a common sense answer to this question, allowing additional time to file a claim for Homeowners’ Exemption, with caveats. Per the BOE’s Letter to Assessor’s dated April 1, 2022, “Interested Parties Process: Amendments to Property Tax Rules 462.520 and 462.540 Through the Emergency Rulemaking Process” (available here: https://www.boe.ca.gov/proptaxes/pdf/lta22014.pdf), the following more common sense and fair answer is proposed:
“A transferee who is otherwise eligible for this exclusion and files a claim for the homeowners’ or disabled veterans’ exemption after one year of the purchase or transfer of the family home shall only receive the intergenerational transfer exclusion commencing with the lien date of the assessment year in which the claim is filed. The adjusted full cash value of the family home in that assessment year shall be the adjusted base year value of the family home in the assessment year in which the excluded purchase or transfer took place, factored to the assessment year in which the exemption was filed for both inflation as annually determined in accordance with paragraph (1) of subdivision (a) of section 51 of the Revenue and Taxation Code and any subsequent new construction occurring with respect to the family home.” (BOE’s Letter to Assessor’s dated April 1, 2022, “Interested Parties Process: Amendments to Property Tax Rules 462.520 and 462.540 Through the Emergency Rulemaking Process”, change (F)(1)(B).)
Additional emergency changes further clarify, “If the exemption claim required by subdivision (a)(1) of this rule is filed one year after the transfer for which the claim for exclusion required by subdivision (a)(4) of this rule is filed then the exclusion shall be granted commencing with the lien date of the assessment year in which the last of the two claims is filed.” (Id. at (F)(5).)
Translated, this means that you CAN file the claim for Homeowners’ Exemption late, but will only get the ‘benefits’ thereafter, no refunds of prior taxes paid.
Actual Claim For Exclusion Has A Three (3) Year Deadline; NOT the Same As The Claim For Homeowners’ Exemption
As for the actual claim for exclusion, that is a three (3) year deadline. Go figure.
Per the BOE, an exclusion may be granted as of the date of purchase or transfer if the proper claim form is filed prior to the following dates:
(1) Earlier of either:
• Within three years after the date of purchase or transfer, or
• Before a transfer to a third party.
(2) No later than six months after the date of mailing of a notice of supplemental or escape assessment issued as a result of the purchase or transfer of real property for which the claim is filed.
There may be even more time to file the exclusion form, the BOE continues, “If the notice of supplemental or escape assessment is mailed before the end of the first deadline (earlier of the three year period or third-party transfer), the transferee has until the latter of either the end of the first deadline or six months after the date of the notice of supplemental or escape assessment to file a timely claim.”
If you miss the three year deadline, subject to the various potential additional time allowances, you CAN still file, but then get prospective relief only. i.e. only get the reduced (original) property tax rate after the form is filed, no refund for prior payments as would be the case with a timely filing. Remember, as noted above, this still requires filing of the Homeowners’ Exemption within the one year deadline, no exceptions there.
The BOE provides an example:
A parent transferred a family home to a child in March 2021 and the child timely filed for the homeowners’ exemption, but did not file for the intergenerational transfer exclusion. Thus, the Assessor reassessed the home for the March 2021 change in ownership. A claim for the intergenerational exclusion was later filed in November 2024. Thus, prospective relief for the intergenerational exclusion will be applied as of the January 1, 2024 lien date, in effect for the 2024-25 tax roll year.
Again, this makes no sense. Why allow essentially unlimited time to file the annual exclusion form (albeit three years’ deadline to get the full benefits), if the other form must be filed within a firm one year deadline? Is this another California tax trap?
– Devin Lucas
Author Devin R. Lucas is a Real Estate Attorney, Broker and REALTOR®, specializing in Newport Beach, Costa Mesa and Orange County coastal communities, serving individual and investors in residential real estate.
Lucas Real Estate – Attorney Devin Lucas and CPA Courtney Lucas – are experts in California intra family transfers using all aspects of Propositions 13, 58, 193, 60, 90 and new Proposition 19. Learn more about how Lucas Real Estate may help your family transfer by clicking here.
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