In California, a reassessment of property taxes will occur when ownership of a property is transferred, unless certain exclusions apply. Many family-owned wineries have avoided reassessment for many generations, as the property has passed between spouses or from parent to child, both of which are exempt transfers.

If, however, you hold your vineyard or winery property in a legal entity (i.e. a corporation or LLC), the property is subject to reassessment upon change in ownership of the entity, and the exclusion from reassessment for transfers from a parent to a child does not apply. In some cases, transfer of as little as 1% interest in the entity can trigger reassessment. Generally, a transfer of entity interests results in a reassessment if someone acquires more than 50% of the entity or if there is a cumulative transfer of more than 50% of the entity.

As of last year, the BOE requires a report of any change of ownership in an entity that owns real property in California on BOE form 100. Penalties apply for failure to report any change in ownership. Whether any particular transfer is a change in ownership depends on how the entity acquired the property, the details of prior transfers and any applicable exclusions. The county assessors’ death or real property owner forms also now include a question about the decedent’s interest in any legal entity, for reporting purposes. Therefore, it is important to always consider the property tax consequences before restructuring or making transfers of shares or interests in a legal entity that owns vineyard or winery property, or preparing the interest holders’ estate planning documents.


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