If I purchased my father’s house and it qualified for a property tax exemption, can I refinance my home now and keep the exemption?
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If I purchased my father’s house and it qualified for a property tax exemption, can I refinance my home now and keep the exemption?
I purchased my father’s home 2 years ago. I am concerned that I will lose the exemption if I choose to refinance my home at a lower rate. I am currently paying the amount of property tax that my father had been paying ($3,200 per year for $500,000 purchase price).
Asked on September 8, 2011 under Real Estate Law, California
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you refinance the home that you purchased from your father you will not lose the beneficial property tax exemption that was carried over from parent to child on the $500,00 purchase for the following reasons:
1. a refinance does not qualify as a change of ownership status triggering reassessement since you will stillown the house. The only difference is that the interest rate for the loan will be lower saving you more money;
2. if the property appraises for less than the $500,000 purchase that you made for it, possibly you can have the home's value reassessed for the lower amount. This will possibly save you some money on property taxes.
Good luck.
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