California law provides a variety of ways to transfer real property with property deeds. Since there are several different types of property deeds in California, it’s important to understand the purpose and effect of each type. Read on to learn more about the various options available and which deed you require. Additionally, learn about documentary taxes and how you may be able to reduce or eliminate the amount you pay.
What is a Deed?
Transferring title to real estate is a straightforward process accomplished with a legal instrument known as a deed. However, you will need to choose a specific type of deed depending on your circumstances. For example, people looking to transfer property may use a grant deed, warranty deed, quitclaim deed, gift deed, or fiduciary deed. Each of these property deeds has its own unique purpose.
Deeds Used For Transfer of Real Property in California
California uses two types of deeds to change ownership of real property: grant deeds and quitclaim deeds. Further names such as warranty deed, interspousal deed, or trust transfer deed are simply special identification given to grant deeds or quitclaim deeds based on specific circumstances. For example, an interspousal deed is a type of grant deed used between spouses in a divorce or to add a spouse’s name after marriage.
Here is a quick clarification of technical issues surrounding the transfer of real property in California, including common names and uses for California deeds:
A grant deed transfers an owner’s interest in the property and shows the percentage of interest transferred. Additionally, a California grant deed assures the buyer/grantee that they are receiving valid title to the property, the title has not been conveyed to someone else, and there are no hidden owners or easements. Finally, owners may use a grant deed when selling property or to transfer real property into a living trust.
- Gift Deed – A gift deed is a special type of grant deed that “gifts” ownership of real property interest to another person or entity. This deed is different from a standard grant deed because it specifically designates that the transfer was not subject to a sale, and the grantor received no monetary compensation. Additionally, the person receiving the gifted ownership of the property must report the gift on their federal income tax return.
- Fiduciary Deed – A fiduciary deed is a special type of grant deed executed by a person who has been appointed or selected as a fiduciary for someone else. An example of a fiduciary would be a trustee, guardian, conservator, or similar person. Fiduciaries are authorized to sign and transfer interest in real property owned by the party who appointed them.
A grantor may use a quitclaim deed for the transfer of real property in California for an unrecorded or recorded interest. Furthermore, the grantor may only have a “potential” interest in the property at hand. In other words, they may or may not be named on an earlier recorded deed. With a quitclaim deed, the grantor transfers property to the grantee without any warranties or guarantees.
People often use quitclaim deeds to release unrecorded interest in real property, clear a cloud affecting title to the property, or release one spouse’s interest in real property to the other spouse. However, people tend not to use quitclaim deeds when transferring ownership with an exchange of money or sale of property.
California’s transfer-on-death deed, or beneficiary deed, allows an owner of real property to execute a deed that names a beneficiary. This beneficiary is granted title to the property when the owner dies. Furthermore, the beneficiary will receive title to the property without going through probate. However, the transfer of ownership doesn’t take place until after the owner’s death.
The use of a transfer-on-death deed is limited and is not available for all types of property. It is revocable and an owner can execute and record several transfer-on-death deeds during their ownership of real property. The last recorded deed will be the one in effect.
After Deeds: The New Title
After selecting the appropriate property deed, the grantor must make a decision about the form of title the new property owners will hold. The most common ways to hold title to real property include as a sole owner, tenants-in-common with other owners, a trustee of a trust, joint tenants, community property, or community property with the right of survivorship.
What is Documentary Transfer Tax?
Upon transfer of real property in California, the government imposes a documentary transfer tax on each recorded document in which real property is sold. Documentary transfer tax is like a “sales tax” due at time of transfer of real property in California. However, it should not be confused with annual real property taxes.
The amount of documentary transfer tax varies greatly based on the property’s location and the value of the interest of real property conveyed. Additionally, the seller or buyer must pay the documentary transfer tax at the time of recording a document transferring real property. However, sellers and buyers do not typically have to pay this tax for properly prepared gift or quitclaim deeds.
Calculations of California Real Property Transfer Tax
Calculating real property transfer tax is straightforward. Currently, most counties charge $1.10 per $1000 value of transferred real property in California. For example, on real property valued at $20,000, the county documentary tax would be $22.00. However, each city assesses additional taxes on real property transfers. Furthermore, the amount of additional tax will depend on the city or unincorporated area where the property is located.
Looking for more specific information? Use our convenient transfer tax calculator to help approximate the transfer tax based on the sales price and location of your real property in California.
California Real Property Transfer Tax Exemptions
Upon transfer of real property in California, several types of real estate transactions are exempt from documentary transfer tax. These exemptions are identified in the State Revenue and Taxation Code Section 11902-11930. Some of the more common exemptions to the transfer tax are:
- Instruments to secure debts
- Transfer of property to government entities
- Transfers incidental to reorganization or adjustments
- Transfers of interests in a continuing partnership or similarly treated entity
- Changes in the method of holding title without a change in proportional ownership
- Transfer incident to foreclosure sale or deed in lieu
- Transfer incident to dissolution of marriage or similar order
- Transfers by gift or death
- Transfers into or out of a trust
Be sure to keep these exemptions in mind when structuring transactions to help reduce the transfer tax charged. Also, remember to include a statement explaining the reason for the property tax exemption on the deed at the time of recording. Finally, note you must properly prepare the deed to avoid paying unnecessary real property transfer tax.
A People’s Choice Can Help With the Transfer of Real Property in California
An improperly prepared deed could have severe consequences down the road. However, many title companies no longer help people prepare real property deeds and, as a result, often refer people to our office for low-cost help! Therefore, if you need to record the transfer of real property in California, contact A People’s Choice for more information.
A People’s Choice can help you prepare the necessary real property deeds along with the required preliminary change of ownership forms. Plus, we can facilitate recording the new deed with the correct county recorder’s office for a much lower fee than hiring an attorney.
My widowed brother in California has 3 children living with him all unmarried. He would like to transfer the house to all the three. Which is the least expensive and easiest way to get this done.
Since it is the primary residence for him and the children dont own homes what will be the tax ramifications for him if he gifts or TOD or makes a will on his death.
What would be the tax ramifications for the children and can they avoid reassessment of taxes
Hello, you would need to speak to a tax expert in regards to any financial burden. But when can prepare the deed for you. You can reach us at 800-747-2780.
my father gifted his home as a widower it is also listed as joint tenants at the time of the document being recorded, He did remarry and my question is does his currant wife bare any legal interest on the home Her name is not on the Recorded document
If someone has title with another person as joint tenants with rights of survivorship, their interest goes to the co-tenant upon their death with the recording of some simple documentation showing the death of the joint tenant.
Hi there, a few years back I co-signed for my parents house. Most recently they decided they want to leave the house under my name only & remove theirs. What process/steps do we need to take to make this change? Thank you for your time.
We’d be happy to assist with the preparation of your documents. You can call us at 800-747-2780.
Do real estate planners who prepare wills and trusts, record transfers such as real estate into a trust, or do I need to record it myself at the county office?
Thank you for your comment. Some services would make you do the recordings on your own, but not us. Our trust package covers the preparation of all your documents and we record them with your county.
Your site is intriguing. I hope you can lend me some advice.. I have an acre property in Homeland, CA, with two mobile homes on it. One unit was placed on the property by two seniors who said they would leave me the mobile unit they placed on the property, in lieu of rent, when they died. One died, and the other one moved off the property, leaving unwanted residents in the mobile unit. I have a so-so written agreement stating that the surviving spouse would have a life estate. Could I Quit Claim the property to a friend, noting, ‘sale,’ in a month’s time, in the newspaper, also stating that anyone else who has a claim would come forth, or lose their rights? That way, the old agreement would be nullified, and I could take control of that second unit, placed by Mary and James?
I need to get these unwanted people off of my property asap. Thank you so much.
Hello Julie and thank you for your inquiry. I would obtain legal advice regarding your situation. Once you know how you would like to move forward, you can call the office on 800-747-2780 and a member of staff can assist.
My mom died in Nov 2009. She had a Will and also a Living Trust. I am the only surviving child and named in the documents noted. She owned real estate and I am to inherit this property. I live on the premises with my family and pay the taxes, insurance, utilities, etc, There is no mortgage left, free and clear. I would like to transfer title to my and husband’s name (community property) without the property being re-assessed by the Assessor’s office. Am I “grandfathered” to the rules of the Assessor’s office because of the date of death and not subject to the new propositions ? What is the best way to proceed with this matter ? Quit claim ?
Check with the county assessor’s office regarding this tax issue.
My parents just finished paying their family home off. They want to change the home to their 5 children soon. Is this a good idea and what is the best type of deep for this process?
We can prepare a deed adding parties for a fee of $200. However, they may also want to consider creating a living trust that would leave the property to the children. Please call the office on 800-747-2780 and a member of staff can assist.
Hi. My dad died 3 years ago in california and never knew he owned his parents house. It was discovered after his passing. There’s 3 of us kids who want to put it in our name so we can sell it for a profit. How do we get started? Is there a fast way to do it because we live 3000 miles away from the property.
I would recommend you calling the office. There are different types of probate proceedings that we can help you with. you can reach us at 800-747-2780. You not need to come into our office and nowadays court hearings can be held via zoom.
My family, as a group, is looking to acquire my Grandma’s house. She has passed, and now her children are working as a trust, If we can get it together, they want to transfer title from her name to us.
We want to keep Prop 13, and take advantage of any other tax benefits. Hopefully, avoiding any financial pitfalls along the way.
Does this sound straightforward, or difficult?
If the property is a trust, it should be pretty straightforward. With a trust, there is typically trust administration documents that would need to be done. I really could not comment on the tax and reassessment issue
With a trust, if the property was in the trust, the transfer process is pretty straightforward. I could not comment with regards to the prop 13 and tax issue.
My mother in law owned her family home with her brother and sister and they have both passed on. The title was in all three of their names and they both left their portion to their spouses. What is required to sell the home? Is it just a simple transfer of deed after death to the spouses with all three of their names?How much would it cost?
How is title held? You may want to call our office once you have that information. 805-648-5540
Hello, I am the personal Representative for my grandfather’s state. I will soon be closing his estate by petitioning the court for distribution and I am expected to receive his property here in San Bernardino County. I’ve read in many places there are different kinds of deeds. Back when I file my petition for probate I recall having to file a Preliminary change in ownership statement with the county assessor’s office. At that time I did a exemption because I am his granddaughter and there shouldn’t be a tax reassessment. But now, that i am hoping to close his estate, all i will have is the courts order transferring the property to me. What i can’t figure out is what type of deed i would file and if I needed any additional exemptions or forms are needed for the county assessors office.
Usually the Order, if properly prepared, will serve as the deed transfer document.
There are 3 names on a deed. They are brother and sisters. Brother died can his name be removed from the deed?
It would depend on how title is held.
My husband is deeding our marital home (for example it is worth $100,000.00) to me as he is going in to a nursing home. Do I have to claim “Gift”? What would be the gift tax? Who pays the gift tax?
I would talk to your CPA. I doubt it would be a gift but we are not lawyers nor CPAs.
I have question helpfully you can help clear this up.
My nephew took a loan to purchase a home for my sister and her husband. He never lived in the home and never made any payments or paid the taxes on the home. My sister and her husband are getting a devorce and he agreed to let her keep the home. The problem now is her son who wants money’s from the home if sold. Does he have any rights to the home. Now her son and her name are on the deed.
They probably should have had a written agreement regarding this. It sounds like they will probably have to file a lawsuit to resolve if they cannot reach an agreement.
I want to transfer a house i inherited from my parents to my older brother. I only wanted it in my brother’s name and not my sister-in-law. Is that a problem?
You should be able to do that. Give us a call for help with the paperwork.
Hi Sandy, how can I confirm the transfer of property after probate? I have inherited 2 propertys in CA and dont have a deed?
Normally the recorded Order serves as a deed transfer. You may want to put the properties in a trust to avoid probate which we can help with.
How are County Transfer Tax calculated when the transaction is a part sale/gift of equity to a family member?
I would ask this question to the county recorder’s office who assesses the tax.
My mother is alive and I get 4 acres in her will. My sister is wanting to buy the acres now and put property in her name. we had it survey for amount and my Mom will sell it to her now and give me the money. The acres then be taken out of will. No home is on the property in Northern California. Would there be alot of fees to transfer from my mom to my sister
We could prepare the transfer deed. Fees are $200 plus recording costs. Give us a call at 800-747-2780 for help.