Retaining A Low Proposition 13 Tax Rate On An Inherited Property

Trust and Estate Loans

Retaining a Parents Low Property Tax RateWhen inheriting a property from a parent, often times it will be advantageous for you to also keep your parents low property tax rate. Thankfully California’s Proposition 58 allows a parent to transfer their low property tax rate to a child. Unfortunately, sometimes doing so can be a complicated matter.

If a parent passes and leaves their estate to their children, in many cases one of the children will want to inherit the home and either use it as a residence or as an investment property.  If the parent has owned the home for a long time, there is a good chance that Proposition 13 has kept their property tax rate far lower than it would be if the property was now reassessed. The sibling who wants to inherit the property can also inherit this low property rate. The situation becomes complicated when there is not enough remaining assets in the trust or estate for an equal distribution of trust or estate assets to be made. In this situation a third party loan against the home would be required to make the equal distribution;  allowing all siblings to receive an equal share of the assets. If the third party loan is not handled properly, the County Assessors Office will reject your request for a Proposition 58 exclusion from property tax reassessment and the property taxes will be calculated on the homes current assessed value. That can be a very costly mistake and in some situations. There are many cases where Proposition 58 can save you thousands of dollars annually in property taxes.

If you, one of your siblings or a client of yours is in need of a third party loan to take advantage of California Proposition 58’s exclusion from property tax reassessment call Commercial Loan Corporation at 877-464-1066.  Commercial Loan Corporation specializes in providing private money loans to trusts and estates for situations just like this.

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