the transfer will not effect property taxes...
talk to a tax accountant and lawyer about the considerations other have mentioned
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Besides removing the name from the deed, are your parents undertaking other changes on their respective wills regarding inheritance or transfer of property?
Rather than posting your question on this board, you probably should consult an attorney who may bring up more questions and scenarios.
As for the value of the property --- removing one's name in the deed isn't going to change its value on the property tax records.
That said I think there are not tax consequences even when doing an inter-family transfer. I say that because of the fact that when an estate passes to heirs the house's basis is raised to the current market value. This allows the heirs to sell the property without paying capital gains. But if the parents place the heirs on title before passing, when the heir sells they have to pay capital gains tax based on the difference between the old basis and the new market sales price.
If I was presnted with a listing where the mother had been granted sole title before the passing of the father I'd have to get legal advice for them. I think that she keeps the old basis value and then would have to pay the capitla gains.
Remember that if your parents sell before passing they can each keep $250,000, $500,000 total capital gains tax free. If you Dad removes himself and passes, the Mom sells based on the old cost basis she can only keep $250,000 tax free.
That is far more money kept in the family than any amount of property taxes.
Please consult your tax accountant to make sure there are no ramifications regarding their personal federal and state income taxes. Also they need to make sure there is a will in place since as the sole owner there is less protection from the government (compared to joint tenancy). In case your father is planning to purchase a new property as his primary residence he might want to take advantage of props 60 and 90 which allow homeowners to keep their old property tax basis on their new purchase.
There are many things to consider so their full long-term plans and goals need to be considered. Feel free to call me.
Oggi Kashi - 415.690.3792 direct
Broker Associate, Paragon Real Estate Group CA DRE 01844627
All data from sources deemed reliable but subject to errors and omissions, and not warranted.