[quote=La Jolla Renter]I have heard more than a few times now, that you can buy 49% of a house from an owner, move in, then a few years later deed over the other 51% and keep the old prop 13 tax rate. Obviously this would not work with traditional financing, probably only owner financing???
Anyone know of such a strategy?[/quote]
LJ Renter, I take it you are referring to a wrap-around deed. You have completely erroneous information.
The only way to “pass on” a Prop. 13 entitlement is through an inter-spousal transfer deed or an intra-family tranfer deed or quitclaim deed to tenant-in-common (someone who was already on title) or a child. The only “quitclaim deeds” of Prop 13-eligible property I have seen were from parent to children with the same last names. If your child does not have the same last name, you must use an intrafamily transfer deed, or hyphenate their name on a quit-claim deed if this is the name they commonly use.
Original joint tenants always retain the right to the prop 13 entitlement after the death of the other joint tenant.
Your Change of Ownership Report you file with the County Assessor under oath will state who the party is that you are deeding the property to and the details of the “sale” so they can determine if it was an “arm’s length” transaction. If you fail to file one of these forms and you have deeded your property to someone other than a person already on title, then the assessor will be notified of the change-of-ownership when they get wind of the transfer thru the recorder’s office and send their owner-of-record a COO form that they will have to fill out in order to get the tax bills sent to the correct owner. If they fail to return the form, the property will lose its prop 13 eligibility. I do not know how the assessor would decide how much taxes to charge after that but my guess is that they would use comparable sales to set a market-rate tax on the property.