Property tax: change in ownership: residential rental property.

Senator Smallwood-Cuevas's property tax reform measure exempts transfers of tenant-occupied residential properties to limited-equity housing cooperatives and community land trusts from triggering reassessment, provided specific tenant ownership thresholds are met.

The legislation establishes two primary pathways for avoiding property tax reassessment. Limited-equity housing cooperatives formed by tenants must demonstrate that residents who previously occupied at least 51% of units maintain equivalent ownership through voting shares or membership interests, with a two-year grace period to achieve this threshold. Separately, transfers to qualifying community land trusts receive automatic exemption upon proper documentation with county recorders.

To maintain these exemptions, cooperatives must submit detailed documentation including articles of incorporation, bylaws, and evidence of tenant participation levels. Those not using recorded deeds must file annual reports identifying unit ownership and occupancy. The measure authorizes county assessors to levy escape assessments if participation requirements lapse, while establishing penalties for non-compliance with reporting mandates. While creating new administrative duties for local tax officials, the legislation specifies that associated costs will not be reimbursed by the state.