Athen Apaquette

I heard that if inherit my grandparents’ home I can keep their tax bill of $1000 per year instead of paying the neighbor’s amount of $6000 per year.  Is that true?

Great question, Rob!

First of all, the property tax bill is based on 1% of the value at the time of transfer and they there is additional tax for your city which varies from city to city depending on the public services they provide and the amount that they have had to borrow through bonds.  We generally calculate 1.25% here in Southern CA cities.

When you buy a property for $200,000 you pay less than the person who years later pays $600,000 for the same house.  The exception or exclusion is when there is just a change in name (like when some gets married or divorce or legally changes their name), when it’s a transfer from natural persons to a trust (this is also like a name change only) or when there is a transfer between parent and child.  The exception does not apply to grandkids or siblings.

So if you are thinking of receiving such a generous gift from your grandparents, consider having it first transferred to your parents (as long as they don’t have
debts that can attach to the property) and then transferred to you.  Not following these steps will cost you $5000 per year for the rest of your ownership – ouch!