Wright v. County of San Mateo

Facts: The owner of an unimproved lot applies for a mortgage to fund the construction of a home to occupy as their primary residence. As a condition of funding, the mortgage holder requires title to the home to be held by an LLC. The owner forms an LLC and buys the land with the mortgage funds. After construction is complete, the owner transfers title from the LLC to the owner. The owner, who is over the age of 55, sells their previous residence in the same county and files a request with the county to transfer the base year value of their prior primary residence to the new property as their primary residence under Proposition (Prop) 13. The county denies the request.

Claim: The owner seeks to transfer the base year value of their previous residence under Prop 13, claiming they are entitled to tax relief since they are over 55 and the newly constructed home is located in the same county as the owner’s previous residence.

Counterclaim: The county claims the owner is not eligible for tax relief since the relevant code section only provides for an individual to obtain the benefits and the owner funded the construction of their residence while title was held by an LLC.

Holding:  A California appeals court holds the owner qualifies for tax relief under Prop 13 since they fulfilled all requirements necessary to do so at the time they applied for relief, and the fact they temporarily held title as an LLC prior to doing so is irrelevant. [Wright v. County of San Mateo (March 29, 2019)­_CA6th_]

Read the case text.