Will transferring title triggering a city tax reappraisal?

[Alex J.]

hey all.  I need the wisdom of this ever so intelligent website to answer some questions for me.  My real estate agent, lawyer, and estate planner do not have a good enough response for this so I was thinking of reaching out to the forums because I am sure I cant be the only person who has experience with this

I have a handful of properties in Los Angeles, South Los Angeles, as well as Houston Texas / Missouri City Texas  that are all currently under my/mywifes name under title

We are working on transferring these assets into an LLC for a few reasons, mainly to reduce liability and also restructure our ownership plan to hopefully scale up easier. I have a lot of equity built up in the properties - especially the Los Angeles deals, and I do not want to trigger a "reappraisal" so that my tax burden does not go up. I have setup LLCs just as a passthru entity for us however I dont know what will constitute a revaluation of price in Los Angeles. Texas I am less concerned about because its already market priced tax rates.

Anybody ever have experience in this? any guidance?  yees yes yes I know i know you guys are not my lawyer doctor wife brother mother dad and nobody is holding you to anything , im just speaking generally!  Legal disclaimers  and what not.

Thank you in advance! 

[KJ L.]

We own a duplex in Los Angeles with FHA financing under personal name and considered moving the property to an LLC but we were advised that a change in title and/or adding new construction will cause reassessment of property value for property tax UNLESS the property is moved to a trust. Based on prop 13, you can move properties in to trust without causing reassessment (consult with lawyer for the type of trust that is allowable to avoid tax increases under prop 13 rules). Also, if you have a residential mortgage on your property, you cannot safely move it into an LLC (could trigger due-on-sale clause) but you can move it into a trust without triggering that clause or negatively affecting your interest rates. Properties held in trusts can have residential mortgages while properties in LLCs can only get commercial loans.

If you need a name of a lawyer to establish trust or other RE holding entities, PM me. 

Hope this helps