If you own real property in joint tenancy, and you transfer your interest, you may trigger a reassessment, which will increase the property tax.
The general rule of joint tenancy under California law is that the creation, transfer, or termination of a joint tenancy interest is a "change in ownership" of the interest transferred (California Code of Regulations, Rule 462.040). A change in ownership will cause reassessment of the interest that has changed ownership.
Example 1. My daughter and I own a rental home as joint tenants. At some later date, I gift my 50% share to my daughter, and she becomes the sole owner. This terminates the joint tenancy because now she is the only owner. This is a change in ownership of my 50% interest; therefore, 50% will be reassessed.
In many states, property taxes are based on regularly reassessed values that track current fair market value - often annually or every few years - without requiring a change in ownership, which can lead to significant increases when home prices rise.
California is distinguished by Proposition 13, passed in 1978. It limits annual increases in a property's assessed value to no more than 2% (or the inflation rate, whichever is lower) unless there is a change in ownership or new construction, at which point the property is reassessed to current market value.
When there is a change in ownership (or new construction), the county assessor reassesses the property to its current fair market value as of the date of transfer. This establishes a new base assessed value.
The base property tax rate in California is 1% of the assessed value, as set by Proposition 13. However, the total effective rate is typically higher, often around 1.1% to 1.3% (or more in some areas) due to additional voter-approved local assessments, such as bonds for schools, infrastructure, or other services. These add-ons vary by location and can significantly increase the annual tax bill for newly purchased properties.
If you purchased a home in 1980 for $100,000, your property tax is likely approximately $1,300 per year, even though the fair market value of your home may be closer to $2,000,000.
There are five main exceptions to the general rule that the creation, transfer, or termination of a joint tenancy interest is a change in ownership of the interest transferred which triggers reassessment.
To better understand these exceptions, it’s important to distinguish the two categories of joint tenants: 1) an original transferor and 2) an other than original transferor.
An original transferor is an original joint tenant owner. An other than original transferor is one who received his interest from an original joint tenant.
If the transfer creates or transfers any joint tenancy interest, and the transferor, or, if more than one, all the transferors, remain as joint tenants, then there is no change in ownership (Rule 462.050(b)).
Example 2. A and B purchase a property as joint tenants. A and B transfer the property to A, B, C and D as joint tenants. No Change in Ownership because A and B are Original Transferors and remain as joint tenants.
Example 3. A purchases a property as the sole owner. A transfers the property to A, B, C, and D as joint tenants. No Change in Ownership because A is the Original Transferor and remains as a joint tenant. B, C, and D are Other Than Original Transferors. A then dies. Because the property is owned in joint tenancy, B, C and D receive A's interest. This is a 100% Change in Ownership because A, the only Original Transferor, has died.
Example 4. A and B purchase a property as joint tenants. A and B transfer the property to B, C, and D as joint tenants. This is a Change in Ownership because all the Original Transferors did not remain joint tenants. A did not remain a joint tenant. Only B remained a joint tenant. The result is that B's 1/3 interest will not be reassessed, but the remaining 2/3 interest will be reassessed.
If a spouse of an Original Transferor acquires an interest in the joint tenancy property either during the period that the Original Transferor holds an interest or by means of a transfer from the Original Transferor, the spouse shall also be considered an Original Transferor.
Example 5. A and B acquire property as joint tenants. A and B transfer the property to A, B, C, D, and E, as joint tenants. E is B's wife. No Change in Ownership because A and B are Original Transferors and both remain as joint tenants. E, as B's wife becomes an Original Transferor. C and D are Other Than Original Transferors.
Example 6. A transfers the property to A and B as joint tenants. No Change in Ownership. A is the Original Transferor and remains a joint tenant. B is an Other Than Original Transferor. A and B then transfer the property to A, B and C. C is A's spouse. C becomes an Original Transferor because he is married to A, who is an Original Transferor, and he acquired his interest while A was an Original Transferor. B also becomes an Original Transferor because he is a transferor who remains a joint tenant.
Example 7. A transfers the property to A and B as joint tenants. No Change in Ownership. A is the Original Transferor and remains a joint tenant. B is an Other Than Original Transferor. A and B then transfer the property to B and C as joint tenants. C is A's husband. Not a Change in Ownership. C becomes an Original Transferor because he acquired his interest by a transfer from A, his wife, who is the Original Transferor. B becomes an Original Transferor because he is a transferor who remains a joint tenant.
There is no change in ownership when the interest of an Original Transferor terminates so long as the terminated interest vests in whole or in part with the remaining Original Transferor(s). But when the interest of the last Original Transferor terminates, there will be a 100% change in ownership.
Example 8. A transfers property to A and B, as joint tenants. No change in ownership. A is the Original Transferor. B is an Other Than Original Transferor. A and B then transfer the property to B and C as joint tenants. B does not become an Original Transferor because A does not remain a joint tenant. Therefore, there is no remaining Original Transferor, which results in a 100% change in ownership.
Example 9. A and B transfer property to A, B, C, and D as joint tenants. No change in ownership. A and B are Original Transferors. C and D are Other Than Original Transferors. A dies or transfers his interest to B, C, and D. No Change in Ownership because B, as an Original Transferor, remains a joint tenant. B then dies or transfers his interest to C and D. 100% change in ownership because B was the last Original Transferor.
When an Other Than Original Transferor's interest terminates, and all or a portion of his interest is transferred to a remaining Original Transferor, there is no change in ownership.
Example 10. A transfers property to A and B, as joint tenants. No change in ownership. A is the Original Transferor. B is an Other Than Original Transferor. A and B then transfer the property to A and C. No change in ownership because A, as the Original Transferor, remains a joint tenant. C is an Other Than Original Transferor.
Example 11. A and B transfer property to A, B, C and D as joint tenants. No change in ownership. A and B are the Original Transferors and C and D are Other Than Original Transferors. A dies or transfers her interest to B, C and D. No change in ownership because B, an Original Transferor, remains a joint tenant. C, who is an Other Than Original Owner, transfers his share to B and D. No change in ownership because B is an Original Transferor.
There is no change in ownership if the transfer between co-owners results in a change in the method of holding title but does not change the proportional interests of the co-owners, such as a transfer terminating a joint tenancy and creating a tenancy in common of equal interests.
A common estate planning step for joint tenants is to transfer one's interest into a revocable living trust (where the joint tenant is the grantor, trustee, and beneficiary during their lifetime).
Under Revenue and Taxation Code §62(d), this type of transfer does not trigger a change in ownership or reassessment. The law treats it as no real change in beneficial ownership—the person still controls and benefits from the property through the trust.
However, note that this transfer severs the joint tenancy as to the transferred interest (turning it into a tenancy in common with the other joint tenant(s)), eliminating the right of survivorship for that share. Many people accept this trade-off for the probate avoidance and flexibility a trust provides.
County assessors may request documentation (such as a trust certification) to confirm the trust qualifies as revocable.
For parent-child property transfers using joint tenancy, the passage of Proposition 19 marked a significant shift—one that makes the technical joint tenancy change-in-ownership rules far more relevant today than they were just a few years ago.
Prior to February 16, 2021 (the effective date for Prop 19's transfer changes), the parent-child reassessment exclusion was exceptionally broad. It shielded virtually any real property transferred from parent to child from reassessment, including rentals, vacation homes, and investment properties.
In the world of joint tenancies, this meant families could often ignore the finer points of the change-in-ownership rules. Even if adding a child to title or the child's inheritance via survivorship technically triggered a reassessment under those rules, claiming the parent-child exclusion would prevent it. The exclusion essentially overrode the joint tenancy provisions, preserving the low Proposition 13 assessed value with minimal hassle.
But Proposition 19 has sharply restricted the parent-child exclusion. Now, it applies only in limited cases, mainly when the property is the parent's principal residence and the child makes it their own primary home (with a value cap: the original assessed value plus an inflation-adjusted amount, currently $1,044,586 for transfers occurring on or after February 16, 2025).
For most other properties, or even family homes that don't meet the occupancy requirements, the exclusion offers no relief.
This change removes the broad safety net that once existed. Families using joint tenancy for parent-child transfers can no longer assume the exclusion will bail them out if a change in ownership occurs. Instead, they must rely directly on the joint tenancy rules (and their exceptions) to avoid or minimize reassessment.
Proper application of concepts like "original transferor" status becomes critical: It can defer reassessment during the parent's lifetime or limit it upon death. A mistake here, without the parent-child exclusion to fall back on, could result in a full reassessment and a sharply higher tax bill on a property with decades of built-up appreciation.
Proposition 19 has thrust the joint tenancy rules into the spotlight for intergenerational planning. What was once a "nice-to-know" detail is now often a "must-know" to protect against unintended tax consequences.
Most estate planning attorneys steer clients toward revocable living trusts as an alternative to joint tenancy. While trusts do not inherently avoid reassessment upon the owner's death (the distribution to beneficiaries can still trigger it, subject to exclusions like those under Prop 19), they do reliably avoid probate and offer more flexibility for structuring transfers.
If you're evaluating joint tenancy or trusts for your family, it's wise to review your specific setup with a qualified attorney or your county assessor.