photo
commentary
Avoiding unfair property reassessment
Published Thursday, 07-Aug-2003 in issue 815
GUEST COMMENTARY
by Carole Migden
We all know that the cost of property in California has skyrocketed in the past few years. Many couples purchased property together so they could avoid increasing rents and property taxes. And when a married person dies, his or her spouse generally keeps the house in which they made their lives together. Fortunately, they are exempt from huge property tax increases that might cause them to lose their homes. It’s the compassionate thing to do during a time of great loss. And fortunately, it’s the same thing for domestic partners, right?
Unfortunately, the answer to that question is “not necessarily.”
But on July 9, California made a giant leap toward full equality for California’s registered domestic partners, when Board of Equalization member John Chiang and Controller Steve Westly joined me in approving a property tax rule that helps domestic partners avoid discriminatory property reassessment.
We heard case after case of long-term domestic partners that had purchased their houses thinking they would be able to give their partners their homes when they died. But the specter of discriminatory property taxation reared its ugly head and people found that when their partners died, their tax liability could go from hundreds of dollars per year to literally tens of thousands. All too often people lost their houses during the already crippling process of mourning for their partner. So we passed the ruling that allows domestic partners to purchase property using joint tenancy and avoid that eventuality.
San Diego County Assessor Gregory Smith claims that will cost the county money and open up major tax avoidance schemes. While the first is somewhat true, the second fails the litmus test of probability. We estimate a statewide revenue impact of less than $750,000 the first year in the entire state. But we collect $25 billion in property taxes each year, so it comes out to be less than one-thousandth of a percent of the collection. I’d say that’s a fair price to pay for equality for gay and lesbian couples and the ability to keep our houses when we suffer the devastating loss of our partners.
My purpose in introducing the changes was to give domestic partners and those in intimate personal relationships the same exclusions from reassessment upon transfer as are provided to spouses. Our relationships are as caring, as lasting and as binding. And further, certainly there are some ways in which people can use the ruling for personal gain. But the ruling applies only to joint tenants — not to companies or corporations. Realistically, I can tell you that joint tenancy is a very risky way to own property unless you’re truly committed to the other joint tenant. Both owners have equal say in what happens to the property. If you want to take advantage of the tax system, this isn’t the way to do it. There are plenty of other legal entities much better suited to tax-avoidance schemes. Property owners know that it’s hardly a smart way to try to cheat a very complicated tax collection system. So I’m asking you now to contact your legislators to help me convince the County Assessor that the rule changes are right and that you expect them to be implemented fairly when they come into effect. Carole Migden is chair of the California Board of Equalization
E-mail

Send the story “Avoiding unfair property reassessment”

Recipient's e-mail: 
Your e-mail: 
Additional note: 
(optional) 
E-mail Story     Print Print Story     Share Bookmark & Share Story
Classifieds Place a Classified Ad Business Directory Real Estate
Contact Advertise About GLT