You work hard to build and protect your Malibu estate. Yet a few title decisions or missed forms can change your annual property taxes and your family’s long‑term plan. If you understand how California property taxes work, what Proposition 19 changed, and how federal estate tax interacts with Malibu real estate, you can plan with confidence. This guide distills what matters most and points you to the right filings and next steps. Let’s dive in.
Malibu property tax basics
Under California’s Prop 13, the general property tax rate is 1% of assessed value, and the assessor can increase your assessed value by no more than the inflation rate, capped at 2% per year, until there is a reassessment event like a sale or new construction. See a clear overview of these rules from a county assessor resource on Prop 13 basics (assessor explainer).
Your total bill may also include voter‑approved bonds and special district assessments. These vary by parcel, so review your current LA County tax bill to see exact line items.
If the Malibu home is your primary residence, the homeowner’s exemption reduces assessed value by $7,000, which is about a $70 savings at the 1% base rate. Confirm that your exemption is on file.
How Prop 19 changes transfers
Parent‑child transfers. Proposition 19 narrowed intergenerational exclusions. Today, a parent‑to‑child (or grandparent‑to‑grandchild in certain cases) transfer keeps the prior taxable value only if the property is the family home, the child makes it their principal residence within one year, and the transfer meets value limits and filing deadlines. Many vacation or rental homes will be reassessed. Review the state’s summary of the rules (BOE Prop 19 guidance).
Portability for 55+, disabled, and disaster victims. Prop 19 expanded the ability to transfer a lower base‑year value to a replacement primary residence anywhere in California, subject to rules and timing. Claims must be filed within set windows (base‑year value transfer overview).
Estate tax snapshot for Malibu owners
For federal estate tax, the basic exclusion amount for decedents in 2025 is $13,990,000 per person (IRS Form 706 instructions). California does not impose a separate state estate or inheritance tax, though local property rules still apply (IRS estate tax overview).
Planning often blends lifetime gifting, trusts, and marital strategies. Coordinate any estate plan with California property‑tax rules so you do not trigger reassessment unintentionally.
Title and transfer tools to consider
Below are common tools and how they interact with California reassessment and federal estate planning. The exact outcome depends on drafting and who retains which rights.
Revocable living trust
- What it does: Holds title during life and avoids probate at death.
- Property tax: Transfers into a revocable trust generally do not trigger reassessment when you remain the present beneficiary (BOE change‑in‑ownership FAQs). On death, reassessment rules apply unless an exclusion fits.
- Estate tax: Does not reduce federal estate tax by itself.
Interspousal or registered domestic partner transfers
- Property tax: Exempt from reassessment when properly claimed (BOE change‑in‑ownership FAQs). Useful for title clean‑up and estate planning between spouses.
Parent to child after Prop 19
- Property tax: Limited to a qualifying family home that the child occupies as a principal residence within required timelines and value limits. Most second homes or rentals will be reassessed (BOE Prop 19 guidance).
Qualified Personal Residence Trusts (QPRTs)
- Estate tax: Can reduce taxable estate by gifting a remainder interest while you retain the right to live in the home for a term.
- Property tax: Often treated as a change in ownership that can trigger reassessment unless very carefully structured; Prop 19 reduced prior safety nets for transfers where a child will not occupy the home (QPRT practitioner overview).
Holding title in an LLC or partnership
- Potential benefits: Asset protection and centralized management.
- Property tax: Transfers of interests or control can count as a change in ownership under California’s legal‑entity rules, which may trigger reassessment if more than a threshold interest or control shifts (BOE legal‑entity rules).
1031 exchanges for investment property
- Tax focus: Can defer federal capital gains on the sale of Malibu investment property if you acquire like‑kind investment property under strict identification and timing rules (IRS Publication 544).
- Property tax: The replacement property is assessed at its market purchase price. A 1031 exchange does not preserve the sold property’s assessed value for the new property.
Transaction timing, filings, and local taxes
- Supplemental assessments. A change in ownership or completion of new construction triggers reassessment and a prorated supplemental bill for the remainder of the fiscal year. Counties typically send a notice before billing. Be clear in escrow which party will pay the supplemental bill and when it will arrive (supplemental and base‑year transfer overview).
- Required filings. File the Preliminary Change of Ownership Report at recording and any change‑of‑ownership statements by the deadlines to avoid penalties and preserve relief where available (BOE change‑in‑ownership FAQs).
- Documentary transfer tax. In Los Angeles County, the standard rate is $0.55 per $500 of consideration (about 0.11%). Some cities add local transfer taxes. Malibu is not subject to the City of Los Angeles Measure ULA transfer tax since that tax applies inside the City of Los Angeles only (LA County DTT rules).
A Malibu owner’s planning checklist
Use this quick list to frame conversations with your CPA, estate attorney, and title/escrow team.
- Confirm your current assessed value and all parcel charges on the latest tax bill. Note any bond assessments or special district fees.
- If the home is your primary residence, verify the homeowner’s exemption is on file.
- Before any parent‑child transfer, map Prop 19’s principal residence and value‑limit tests, and calendar the filing deadlines for claim forms.
- If you use trusts, LLCs, or gifting strategies, coordinate three analyses before you sign: California reassessment risk, federal gift/estate tax impact, and asset‑protection goals.
- For sales and purchases, budget for LA County documentary transfer tax, and plan for a supplemental bill after closing. Clarify in escrow who pays the supplemental amount.
Planning ahead helps you protect your Prop 13 value where possible and reduce surprises during a sale or transfer. When you want a discreet, high‑touch partner who understands Malibu property and complex deal flow, connect with Cooper Mount to align your real estate strategy with your long‑term plan.
FAQs
How does Prop 13 limit Malibu property taxes?
- Prop 13 sets a base 1% tax on assessed value and caps annual assessed‑value increases at the inflation rate up to 2% until a reassessment event occurs (assessor explainer).
What does Prop 19 mean if I inherit a Malibu home?
- The parent‑child exclusion now applies mainly to a family home you occupy as your principal residence within one year and within value limits, otherwise the property is reassessed (BOE Prop 19 guidance).
Are Malibu sales subject to LA City’s ULA “mansion tax”?
- No, Measure ULA applies to transfers within the City of Los Angeles; Malibu sales follow LA County’s documentary transfer tax without that city surcharge (LA County DTT rules).
Does putting my Malibu home in a living trust change my assessed value?
- Generally no for a revocable living trust where you remain the present beneficiary; reassessment questions arise when the trust becomes irrevocable or beneficial interests change (BOE change‑in‑ownership FAQs).
How do supplemental tax bills work in Los Angeles County?
- After a change in ownership or new construction, the county issues a prorated supplemental assessment and bill for the rest of the fiscal year, separate from the regular bill (supplemental overview).
What estate tax threshold applies to Malibu owners in 2025?
- The federal basic exclusion amount is $13,990,000 per person for decedents in 2025; California has no separate estate or inheritance tax (IRS Form 706 instructions).
