How can I transfer my house to my child without paying higher property tax by him?

Answer 1

You can't. When a property is transferred, most tax districts will re-appraise the property and it's quite common for the tax bill to increase, sometimes significantly.

You also will have the issue of Gift Tax to deal with. You get an annual exclusion of $12,000 but any gifts above that will require you to file a Gift Tax return. You can use your lifetime exclusion to avoid any Gift Tax if the value of the property is less than $2 million, but that will permanently reduce your Estate Tax exclusion amount. There could be adverse tax consequences to your estate when you pass on if your estate's value is significant.

Answer 2

Where I live, the county appraisers office is required to establish the market value of each property every 3 years. Property taxes are based on this number. If your area uses a similar system, taxes will be adjusted even if you don't transfer ownership. If taxes are only adjusted when ownership transfers, I doubt it is possible to transfer ownership without triggering an adjustment.

Both answers mentioning a Quitclaim Deed are incomplete. A quitclaim deed transfers any ownership a person may or may not have. If doesn't even prove they had an interest. It is primarily used when there is some doubt about if an individual may have a claim against the property. That person would be asked to sign a quitclaim deed giving up any claim. Someone actually listed as an owner would NOT use a quitclaim as their interest would not be in doubt.

Michael W: If transferring title to a child would result in a reassessment of taxes, transferring title to a trust should as well.

Answer 3

It depends on how your state determines property tax abatements.

Victoria is not correct. Quitclaims are only used for property where multiple people are listed as the owners (such as a husband and wife).

One possible solution may be to transfer your home to a living trust. Contact an estate planning attorney for more information.

Answer 4

Quit Claim Deed or Deed of Gift.
You will need to contact closing attorney to have this document prepared and than recorded. Once your name is out of the Deed, your child must refinance in order to take your name completely out of the real property.