In a recent published decision, the appellate court in Marin County held that terminating a family joint tenancy by transferring title into tenancy in common can constitute a “change in ownership” for the purpose of tax reassesment, even though the same family members stay on title. In Benson vs. Marin County Assessment Appeals Board, 219 Cal.App.4th 1445 (Sept. 2013), two brothers inherited a residential property from their mother. One of the brothers was already on title when the mother died, so he put his other brother on title with him < as a joint tenant. For 10 years, the two brothers held title as joint tenants. Then the second brother deeded his own joint tenancy interest to himself as a tenant in common with his brother. He and his brother continued to own the property and retained the same percentage ownership as before. The Marin County tax assessor determined a “change in ownership” occurred as a result of the recording of the deed changing the method of holding title from Joint Tenancy to Tenants in Common. The original assessed value was $100,631 and upon Reassessment, the assessed value increased to $525,323.00, thus resulting in a significant increase in taxes. The Assessment Appeals Board disagreed and found that this was merely a change in the way title was held and therefore did not constitute a “change in ownership”. The Tax Assessor appealed.

The appellate court analyzed the complicated statutes dealing with changes in ownership and concluded that the Tax Assessor was correct and that a “change in ownership” occurred when the title was changed between the two brothers from joint tenancy to tenants in common. Generally, the creation of a joint tenancy, where the transferor remains on title as one of the joint tenants, does not constitute a “change in ownership”. However, if the joint tenants later transfer title from the joint tenancy into tenants in common, this does trigger a reassessment for tax purposes.