When property changes hands in California, one of the critical steps involved is the completion of the Preliminary Change of Ownership Report (PCOR). This form is a required document that provides essential details about the transfer of property and helps county assessors determine if a reassessment of the property’s value is necessary. This document is required when conveying real property into a revocable living trust to avoid unwarranted fees.
Purpose of the PCOR
The PCOR is used to inform the county assessor’s office about the specifics of a property transfer. Under Proposition 13, property taxes in California are based on the property’s assessed value, which can only be increased by a small percentage each year unless the property is sold or ownership is otherwise transferred. When a change in ownership occurs, the property is typically reassessed at its current market value, which can lead to an increase in property taxes.
Key Information Required
The PCOR collects a variety of information, including:
- Details of the Property: Address, parcel number, and description of the property being transferred.
- Nature of the Transfer: Whether the transfer is due to a sale, gift, inheritance, or other reasons.
- Transfer Price: The purchase price or the value of the property at the time of transfer.
- Transferor and Transferee Information: Names, addresses, and relationship (if any) between the parties involved in the transfer.
- Exemptions: Any claimed exemptions from reassessment, such as transfers between spouses or between parents and children under certain conditions.
Importance of Filing
Filing the PCOR is typically required whenever property ownership changes, and it must be submitted to the county recorder’s office at the time the deed is recorded. Failing to file the PCOR can result in penalties, and the assessor may require a separate Change in Ownership Statement, which is more detailed and may be subject to a fee.
Benefits of the PCOR
- Transparency: Helps ensure that property tax assessments are accurate and based on current ownership information.
- Exemptions: Allows property owners to claim any applicable exemptions from reassessment, potentially saving on property taxes.
In summary, the Preliminary Change of Ownership Report (PCOR) is a vital document in the property transfer process in California. It provides necessary information to the applicable county assessor, helping to maintain accurate property tax records and ensuring compliance with state tax laws. The San Diego County Recorder’s Office provides a fillable copy that can be found here: Preliminary Change of Ownership Report (sdarcc.gov)