Under Proposition 13, certain transfers are exempt from reassessment. Which of the following transfers is NOT exempt and WOULD trigger a full reassessment of the property's value?
Correct Answer
D) An arm's-length sale of property to an unrelated third-party buyer for fair market value
An arm's-length sale to an unrelated third party is a change in ownership under Revenue and Taxation Code §60 and triggers a full Proposition 13 reassessment. The property's assessed value is reset to current fair market value — typically the purchase price — which becomes the new base year value under Cal. Const. Art. XIII A, §2.
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Previous Question
A California homeowner sells a property in 2025 for $1,200,000. The property was purchased in 1995 and has been assessed under Proposition 13 since then. What happens to the property's assessed value when the new buyer takes ownership?
Next Question
A California property sells for $650,000, with the buyer assuming an existing loan of $200,000. The county documentary transfer tax at $1.10 per $1,000 is calculated on the amount of consideration excluding the assumed loan. What is the documentary transfer tax?