The deal may be an assessment event
Commercial property owners often separate the real-estate file from the ownership file. A building sits in an LLC, the LLC interests change hands, and the parties assume the county will see only a private transaction. In California, that assumption can be expensive.
A transfer of stock, partnership interests, or LLC interests generally is not treated as a transfer of the entity’s real property. But California Revenue and Taxation Code section 64 creates important exceptions. A person or entity that obtains control—generally more than 50 percent of the voting stock, or a majority ownership interest in a partnership, LLC, or other entity—can trigger a change in ownership of the California real property held by that entity. Read the current statute in Revenue and Taxation Code section 64.
This is a different question from whether the property is over-assessed after the county acts. For that later question, see Castellan’s guide to California commercial property tax: do not wait for the annual appeal window. The first task is to identify whether the transaction itself creates a new assessment event.
Three ownership patterns to check
1. A buyer crosses the control threshold
Section 64(c) addresses a direct or indirect acquisition of control. For a corporation, the trigger is more than 50 percent of voting stock. For a partnership, LLC, or other legal entity, it is a majority ownership interest. The statute also covers a transaction in which the buyer acquires 50 percent or less in the particular step but obtains control through that step.
The practical point is that a transaction should be reviewed cumulatively and across entity layers. A staged purchase, a merger, or a transfer through a parent entity may need the same analysis as a one-document sale. If the entity owns California real property on the relevant date, the county assessor—not the parties—determines the resulting reappraisal after the State Board of Equalization reviews the legal-entity filing.
A control change does not mean every conceivable asset becomes taxable at a new value. The Board of Equalization’s Legal Entity Ownership Program explanation says it reviews the statement, determines whether a change in control or ownership occurred, and reports qualifying information to the county assessor where the property is located. The assessor performs the reassessment.
2. Original co-owners transfer more than 50 percent
A separate rule applies when real property was transferred to a legal entity in a transaction excluded from reassessment under section 62(a)(2). The people holding interests immediately after that excluded transfer become the “original co-owners.” If any original co-owner or group of original co-owners transfers interests representing cumulatively more than 50 percent of the entity’s total interests, the previously excluded real property is reappraised under section 64(d).
This is not the same as a later buyer obtaining control. Section 64(d) tracks a specific history: how the property entered the entity, whether reassessment was previously excluded, who the original co-owners were, and how much of those interests later moved. The statute states that the reappraisal date is the date of the transfer that individually or cumulatively exceeds 50 percent. Keep the original contribution documents and ownership ledger; a current cap table alone may not show the full history.
3. An exclusion may still apply
A transaction that looks like a change in control or ownership is not automatically a new assessment. California provides exclusions for certain legal-entity transfers. The BOE’s LEOP exclusions guidance explains that an exclusion may apply, but it also makes an important procedural point: the entity must still file BOE-100-B when required, even if it believes the transfer is excluded.
That means “we qualify for an exclusion” is not a substitute for documenting the transaction and meeting the reporting rule. The exclusion analysis can depend on proportional ownership, the relationship among the parties, the structure of the transfer, and the property’s prior history. Have the transaction team preserve the relevant agreements rather than relying on a closing summary that describes only business terms.
The BOE-100-B filing clock
When the reporting rule applies, the legal entity generally must file a signed change-in-ownership statement with the BOE within 90 days. Revenue and Taxation Code section 480.2 requires the statement to identify the counties where the entity owns real property and to provide transaction information, including the parties, date, property, and original co-owners where relevant.
The BOE’s current BOE-100-B form states that the filing is due within 90 days of a change in control or change in ownership when the entity, or an entity under its ownership control, owned or in certain circumstances leased an interest in California real property. The form also states that the BOE may require a filing within 90 days of a written request, even if no change in control or ownership occurred.
Do not confuse this 90-day BOE reporting period with a county assessment-appeal period. They are separate processes, administered by different bodies, with different consequences. Failure to file can produce a statutory penalty. Section 480.2 describes a penalty of 10 percent of the taxes applicable to the new base-year value reflecting the change, or 10 percent of current-year taxes if no change in ownership occurred.
A useful closing checklist is:
- Identify every California parcel owned by the entity and its controlled subsidiaries on the transaction date.
- Map direct and indirect ownership before and after the transaction.
- Test both section 64(c) control and section 64(d) original-co-owner history.
- Confirm whether an exclusion applies and preserve the documents supporting it.
- Calendar the 90-day BOE-100-B deadline independently from county appeal dates.
- If the county later issues a new assessment, review the valuation evidence and the applicable county filing window.
If the county reappraises the property
A reappraisal event does not guarantee that the assessor’s value is correct. Once a county issues an assessment, the owner can evaluate whether the value reflects the property’s fair market value under the applicable valuation date and county procedure. California’s assessment-appeals guidance explains that the county assessment appeals process is the forum for resolving a disagreement with the assessor, while the BOE provides statewide rules and materials.
For a commercial asset, organize the evidence around the property—not merely the transaction. Depending on the asset, that can include executed leases, operating statements, stabilized income, expense support, comparable sales, replacement-cost information, physical condition, and records showing what interests were actually transferred. A purchase price may be relevant, but it is not a promise that the county or an appeals board will adopt that number without examining the transaction’s terms and the property’s rights and restrictions.
County practice matters. Filing forms, fees, hearing procedures, and deadlines are administered locally, so confirm the current instructions with the clerk of the board or assessor in the county where the property sits. This article is general information, not legal or tax advice, and it does not determine whether a particular transaction qualifies for an exclusion.
If an ownership transaction has left you with a new California assessment—or a notice you cannot reconcile with the deal—request Castellan’s free property-tax analysis. We can help you organize the ownership timeline, assessment record, and valuation evidence before a county deadline closes.