Revenue and Taxation Code Section 69 allows owners who own property to transfer the base year value of the original property that
has been substantially damaged or destroyed by a disaster to comparable property. The following requirements must be met:
1. The disaster must be a major misfortune or calamity in an area proclaimed by the Governor to be in a state of disaster as a
result of the misfortune or calamity;
2. The replacement property must have been acquired or newly constructed within five years after the date of the disaster
(including land); and
3. The buyer of the replacement property must have been the owner of the damaged property. Property is considered damaged
or destroyed if it sustains physical damage amounting to more than 50 percent of its full cash value immediately prior to the
disaster. Includes diminution in value resulting from disaster caused permanent restricted access.
Property is substantially damaged if the land or the improvements sustain physical damage amounting to more than 50 percent of
its full cash value immediately prior to the disaster.
The replacement property must be substantially equivalent to the original. A general definition of substantially equivalent is similar
in size, utility, function, and zoning.
In general, the factored base value of the original property will be applied to the replacement provided that the fair market value of
a replacement property on the date of purchase or completion of construction does not exceed 120 percent of full cash value or
fair market value of the original property immediately prior to the date of disaster.
If the full cash value of the replacement property exceeds 120 percent of the full cash value of the original damaged property, then
the amount of the full cash value over 120 percent shall be added to the factored base year value of the original parcel. Once the
factored base year value is transferred to the replacement property, the damaged property will be reassessed at the lower of its
full cash value or the retained factored base year value.
If the full cash value of the replacement property is less than the factored base year value of the original damaged parcel, then the
lower value of the new replacement property shall become the factored base value of the replacement parcel.
If, after the factored base year value is transferred, reconstruction occurs on the damaged property, the new construction shall be
assessed at full cash value.
Co-owners of an original parcel may not independently transfer the original value to two separate properties.
The acquisition of an ownership interest in a legal entity that, directly or indirectly, owns real property is not an acquisition of
replacement property under the law.
For further information, contact the Assessor’s Office.
