Zephyr Quarterly Newsletter
A tax break long granted to spouses under Proposition 13 now extends to domestic partners as well. The 3rd District Court of Appeals in Sacramento ruled that domestic partners may now be protected from potential tax increases due to property ownership changes that are caused by separation or death.
The original law, passed in 1978, capped property taxes at 1% of the property value. But when properties change hands they are reassessed to full market value, often leading to substantial tax increases. Proposition 13 failed to fully define changes of ownership, so a law was created the next year that ruled that transfers of property between husbands and wives due to death or divorce would be
protected from such tax increases. That protection will now apply to same-sex couples, whose goal is
to enjoy the same rights married couples do. The new tax break will be applicable to same-sex domestic partners of any age and unmarried opposite-sex couples in which at least one partner is 62 or older.