"What Is the Preliminary Change of Ownership Report in a California Escrow, and How Do I Fill It Out Before Closing?"

The escrow package lands in your inbox with little yellow flags on every page that needs a signature. Most of it comes from your lender. Near the back is a form with the county assessor's name at the top. It asks whether you plan to live in the home and the date you expect to move in. It also wants to know what you paid and how you are paying for it. It is called the Preliminary Change of Ownership Report, and in California it rides to the recorder's office with your deed.

The Preliminary Change of Ownership Report, form BOE-502-A, is a confidential questionnaire you fill out and file with your deed at the county recorder, so the assessor knows the home changed hands and on what terms. Filing it with the deed keeps the extra $20 recording fee off your closing statement, the fee Revenue and Taxation Code section 480.3 lets the recorder charge when a deed arrives without it.

I'm Jeff Moran, a mortgage broker in Bluffton, South Carolina, originating since 1996, NMLS #483943, through C2 Financial Corporation, licensed in fifteen states, including California. In California, a questionnaire for the county assessor travels with your deed to the recorder, and I want to walk you through how to answer it so the first year of tax bills goes the way you expect.

What is the Preliminary Change of Ownership Report in California?

It is a state form, prescribed by the California State Board of Equalization, that tells the county assessor a property has changed owners and on what terms. The current version is form BOE-502-A, and the form itself says it may be used in all 58 California counties. The person who fills it out is the transferee, which in a purchase means you.

The taxable value of a California home is set when it changes hands and then rises slowly while one owner holds it, so the report is how the assessor hears about the event that matters most to the tax bill.

Under Revenue and Taxation Code section 480.3, every county assessor and recorder has to make the form available without charge, and you sign it certifying that what you wrote is true, correct and complete to the best of your knowledge. In most escrows the escrow holder prepares it from the file and sends it to you with the rest of the package. The signature is still yours, and so are the answers.

Filing the Preliminary Change of Ownership Report with the deed saves the $20 recording fee

The statute ties the fee to the moment the deed is recorded. Section 480.3 says that when a document evidencing a change in ownership is presented to the recorder without the Preliminary Change of Ownership Report filed at the same time, the recorder may charge an additional recording fee of twenty dollars. County assessors repeat it in their own instructions, San Joaquin County and San Luis Obispo County among them.

The fee is the state's nudge to get the report into the recorder's hands with the deed rather than weeks later, and your part is to return it signed, with the questions answered, before the deed goes out for recording. The California mortgage page covers how a California closing runs through escrow.

Your answers feed the reassessment and the bills that follow

The assessor reads your report to decide whether a change in ownership happened, whether any part of it is excluded from reassessment, and what the new taxable value should be. Your purchase price and terms are the starting point for that value. Once the assessor sets it, the county bills the difference between the seller's old taxable value and your new one for the rest of the tax year. That is the supplemental bill, and it comes to you rather than to your lender. The California supplemental property tax bill walks through why one closing can produce two of them, and how taxes and insurance are collected inside your payment explains why the impound account was never sized to pay it.

Part 1 of the report is where the exclusions live. It asks whether the transfer is between spouses, between parents and children, into or out of a trust, and whether this purchase replaces a principal residence for an owner who is at least 55. That last line is the Proposition 19 base year value transfer, and checking the box does not make the claim for you. Buying again in California at 55 or older covers the separate claim form, the two-year clock and the three-transfer limit.

Then there is the principal residence question near the top of the form, which asks whether the property is intended as your principal residence and the date you occupied it or intend to. That answer connects to the homeowners' exemption, which takes up to $7,000 off the assessed value of the home you live in. The exemption is claimed on its own form, BOE-266, filed with the assessor, and on a new purchase the full exemption on the supplemental assessment depends on filing within 30 days of the assessor's notice. So a yes on the report is the first step, and the BOE-266 claim is the one that puts the exemption on your bill.

Filling out BOE-502-A, section by section

The escrow holder will have most of the form typed in before you see it. These are the parts worth reading closely before you sign.

The top of the form. Your name as it appears on the deed, the seller's name, the property address, the assessor's parcel number and the mailing address where you want property tax information sent. If the mailing address is wrong, the supplemental bill goes somewhere you are not.

Principal residence and disabled veteran status. Whether you intend to live in the home and when, and whether you are a 100 percent rated disabled veteran or the unmarried surviving spouse of one. Both answers point the assessor toward an exemption that gets its own claim form later.

Part 1, transfer information. The exclusion questions described above. On an ordinary purchase from a stranger, the answer to nearly all of them is no.

Parts 2 through 4, the transfer, the price and the property. The date of transfer, the total purchase price, the cash down payment, and the terms of the first and any second deed of trust, including the interest rate, the term and the monthly payment. Your loan amount, rate and term are already settled by the time you sign, so please make sure these match your Closing Disclosure.

Then you sign and date it, certifying it is true, correct and complete to the best of your knowledge.

The Change in Ownership Statement, if the assessor asks

The report is the preliminary version. California also has a Change in Ownership Statement, form BOE-502-AH, and Revenue and Taxation Code section 480 requires the person receiving the property to file one. If the document changing ownership is recorded, the statement is filed with the recorder at that time, and if it is not recorded, it is due within 90 days of the change in ownership. A complete preliminary report filed with the deed takes care of that in an ordinary purchase, which is why most clients never see the longer form.

If the report is missing or incomplete, the assessor mails you a Change in Ownership Statement, and the clock in section 482 starts with that letter. A statement not returned within 90 days of that request carries a penalty of $100 or 10 percent of the taxes on the new taxable value, whichever is greater. For a home eligible for the homeowners' exemption, it is capped at $5,000 when the failure was not willful.

The Preliminary Change of Ownership Report stays confidential

Revenue and Taxation Code section 481 says the information furnished in the preliminary report or the Change in Ownership Statement is held secret by those authorized to receive it, and the statements are not open to public inspection. Your deed and your deed of trust are recorded documents, while the answers on this report, such as your down payment and your loan terms, stay with the assessor, so you can answer it fully.

The steps, in order

1. Please read the report when the escrow package arrives, before signing day. You are the one who knows whether the typed-in answers are right.
2. Please check the mailing address for tax bills. The supplemental bill and the notice before it go there.
3. Please answer the principal residence question and give the date you moved in or plan to. This is the answer that starts the homeowners' exemption conversation.
4. Please look through Part 1 to see whether any exclusion applies to you. If one does, the box on the report is the assessor's first notice, and the separate claim form still has to follow.
5. Please make sure the price and loan terms match your Closing Disclosure, then sign the report and return it with the rest of the package. That is the step that keeps the $20 off the statement and keeps the Change in Ownership Statement letter from being sent.
6. You'll want to keep an eye on the mail from the assessor after closing. The notice of supplemental assessment starts the 30-day window for the full homeowners' exemption.

An illustration, with invented numbers

Numbers below are made up to show the mechanism. They are not a quote, not a prediction, and not an estimate for any address or county.

Say you are buying a home in Fresno County for $520,000, putting $52,000 down, and moving in the week after closing. The escrow package arrives with the report filled in, and you find three things. The mailing address for tax bills is the apartment you are leaving, so you change it. The move-in date is blank, so you write it in. The loan amount came from an earlier Loan Estimate, so you correct it to the Closing Disclosure.

The deed records with the report attached, and no $20 fee appears. A few months later the assessor's notice arrives at the new address, and because you are watching for it, the BOE-266 claim goes in within 30 days and the full $7,000 comes off the supplemental assessment.

Now suppose the deed had recorded without the report. The closing statement carries an extra $20, and a Change in Ownership Statement later arrives at the old apartment, because nobody changed the address. If it stays in a forwarding pile past 90 days, the penalty is the greater of $100 or 10 percent of the tax on the new value. At a combined rate of 1.15 percent, that tax is roughly $5,980 a year, so the penalty would be about $598.

Where this goes wrong

Treating it as one more lender form and signing without reading. The escrow holder cannot know your move-in date, your plans for the home, or that your mailing address changed.

Budgeting the first year from the seller's tax bill. Why the tax figure on a listing describes the seller's household and not yours is the national version of this, and in California the report you just signed is what starts the correction.

Pricing a California purchase with the right tax figure

The price a whole payment actually supports includes a tax line built from your purchase price. You can price your own California scenario without a credit pull and without giving me your name, and choose the option that works best for you. Once you are ready for a letter a seller will take seriously, what a California pre-approval has to account for covers the rest, and you are welcome to call me with any question about the escrow package.

Nothing here is a loan approval, a denial, a commitment to lend, or tax or legal advice. Reassessment, exemptions, filing deadlines and penalties for a specific property are determined under California law by the county assessor and recorder, and are worth confirming with those offices.

Common questions

What is a Preliminary Change of Ownership Report in California?

It is the state form, BOE-502-A, that the person acquiring a property fills out for the county assessor when a deed or other document changing ownership is recorded. Revenue and Taxation Code section 480.3 requires every county assessor and recorder to make it available without charge, and it may be used in all 58 counties. It asks whether the home will be your principal residence, whether any exclusion from reassessment applies, and the purchase price and financing terms.

Do I have to file the Preliminary Change of Ownership Report with my deed in California?

The statute says the person acquiring the property shall complete the report and may file it with the recorder when the deed is recorded. If the deed is presented without it, section 480.3 allows the recorder to charge an additional recording fee, and the assessor then sends you a Change in Ownership Statement to fill out instead. A complete preliminary report filed with the deed takes care of the filing that section 480 requires from every new owner in an ordinary purchase.

What happens if the Preliminary Change of Ownership Report is not filed in California?

The recorder may add an extra charge to the recording fee for the deed, and the assessor mails a Change in Ownership Statement, form BOE-502-AH, to the address on the recorded document. Under Revenue and Taxation Code section 482, a statement not filed within 90 days of that request carries a penalty figured on the taxes on your home's new taxable value. For a home eligible for the homeowners' exemption, section 482 caps that penalty when the failure was not willful.

Is the Preliminary Change of Ownership Report a public record?

No. Under Revenue and Taxation Code section 481, the information in a preliminary change in ownership report or a change in ownership statement is held secret by those authorized to receive it. The statements are not open to public inspection, so the answers you give on the report, such as your down payment and loan terms, stay with the assessor.

Does the Preliminary Change of Ownership Report claim the homeowners' exemption for me?

No. The report asks whether the property is intended as your principal residence, which tells the assessor you may be eligible. The exemption itself is claimed on form BOE-266 filed with the county assessor. On a new purchase, a claim filed within 30 days of the assessor's notice of supplemental assessment receives the full exemption on the supplemental assessment. A claim filed later, before the first installment becomes delinquent, receives 80 percent of it for that year.

Estimates and educational information are not a loan approval or commitment to lend.