Court upholds property tax break for domestic partners

Court upholds property tax break for domestic partners
Bob Egelko, Chronicle Staff Writer

Tuesday, October 2, 2007

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(10-02) 13:39 PDT SACRAMENTO - Domestic partners have the same right as husbands and wives to accept or inherit real estate from one another without big property tax increase, a state appeals court ruled today.

In a victory for same-sex couples, the Third District Court of Appeal in Sacramento upheld regulations approved by the state Board of Equalization in 2003 and a law passed by the Legislature in 2005 that gave registered domestic partners the same tax break as spouses under Proposition 13.

The 1978 initiative rolled back property taxes to 1 percent of the property value and limited increases to 2 percent a year. Property can still be reassessed to full market value when it is sold or changes owners, leading to a substantial tax increase. But Prop. 13 didn't define changes in ownership.

A 1979 law and subsequent ballot measure provided that transfers of property between husbands and wives at death or divorce, and transfers to children or grandchildren, would not be considered ownership changes and were thus protected from tax increases.


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