Clarification ensures tax savings in home ownership transfers between relatives

State Rep. Bradley Slagh has introduced legislation to clarify the intent of an existing state law that prevents the taxable value of a home from being uncapped when ownership is transferred between close relatives.

A recent reinterpretation of the interpretation of the 2014 law has led to instances of partial uncapping, however, when property ownership is transferred from a homeowner to a relative and their spouse, since the spouse is not an immediate relative.

“This interpretation is clearly not what the law intended when it was written,” Slagh said. “So long as a close relative is involved in the transfer, uncapping should not take place.”

Slagh said a constituent he represents brought the issue to his attention, and he’s pleased to partner with them to bring forth this common-sense solution to clarify state law.

House Bill 4572 would ensure an uncapping would not take place in the event of a transfer, so long as a blood relative is a part of the transfer. The new interpretation of the law started in 2022, so the change would be retroactive to correct uncapping incidents that happened after Dec. 30, 2021, which was the tax due date for 2022 property taxes.

The bill is expected to be referred to the Tax Policy Committee for consideration.

###