Perhaps a parent has died, or a spouse, and you are now the one holding the deed, the will or the trust binder. Siblings or a lender may be asking what the house is "worth," and you may not know who decides that, or when. Most people facing this process have never ordered an appraisal or dealt with a county assessor. They worry that one wrong number will cause trouble later. This guide walks through the valuation in the order it usually happens. It explains what each office and professional does and where the rules come from.
Before You Start: Background and Documents Commonly Gathered
The first task is to find out how the house was titled. How title was held decides which valuation path applies. The California Courts' inventory and estimate property value page tells families to look at whether more than one person is listed as owner and whether anyone is named as a beneficiary. It also says to check whether the property was owned separately, in joint tenancy or as community property. Under joint tenancy, if one owner dies, the property passes to the other. A house may also have been held in a trust or as tenants in common. Deeds are public records at the County Recorder's Office in the county where the house sits.
The next question is which process the house will pass through. It may go through a court probate, a trust administration or one of the simplified procedures. Each has different appraisal steps. For the simplified procedures, Probate Code section 13050 leaves certain property out when the estate's value is counted. That includes joint tenancy property and property in a trust the decedent could revoke during their lifetime, among other things.
Documents to gather: - the deed - a certified death certificate - the will or trust instrument, if there is one - prior property tax bills
A person who has custody of an original will generally has to deliver it to the superior court clerk within 30 days after learning of the death, unless a probate petition is filed earlier, under Probate Code section 8200.
Valuation serves at least three purposes: - federal income tax basis - the probate inventory - California property tax reassessment
One appraisal may or may not serve all three. A CPA, an enrolled agent or a tax attorney reviews basis questions. The county assessor's office handles reassessment and exclusion claims.
Step 1: Understand Why the Date of Death Sets the Value
A house's tax value is generally fixed at the moment of death. That can feel abrupt while a family is still grieving, but it gives everyone a single date to work from.
Under 26 U.S.C. § 1014(a), the basis of property acquired from a decedent is generally its fair market value on the date of death. "Basis" is the starting cost used to measure gain or loss when property is later sold. "Fair market value" is what the property would sell for on the open market. People call this rule "stepped-up basis," because the heir's starting cost becomes the value at death, not what the decedent originally paid. If the value dropped, it is stepped down instead. The IRS's Publication 559 adds that gain or loss on inherited property that is a capital asset is considered long term, regardless of how long the heir held it.
26 U.S.C. § 1014(a) uses a different value in some cases, including when an election is made under a separate section, 26 U.S.C. § 2032. Under 26 U.S.C. § 2032, an executor may elect on the federal estate tax return to value the estate as of six months after death. Property distributed or sold within those six months is valued on the date of that event. The election is allowed only if it decreases both the gross estate and the estate tax. It is not available if the return is filed more than one year after its due date, including extensions.
There is an exception for gifts made shortly before death. The IRS's Publication 551, Basis of Assets explains that the stepped-up rule does not apply to appreciated property you or your spouse gave the decedent within one year before death. Publication 551 also explains that in community property states such as California, the total value of the community property, including the surviving spouse's half, generally becomes the basis of the entire property. For that to apply, at least half the community interest must be includible in the decedent's gross estate.
What this means at sale time: the IRS's inherited property sale FAQ says that selling for more than your basis produces a taxable gain. A sale near the date-of-death value therefore generally produces little gain. Whether a particular sale owes tax depends on facts a CPA or tax attorney reviews. The topic of step-up in basis goes further into how the rule works.
Step 2: Get a Qualified Appraisal — What Type and When
A retrospective appraisal estimates fair market value as of a past date, here the date of death. It is the standard tool for setting basis, and it can be ordered months after the death. The appraiser works from comparable sales around that date, not from today's market.
Who performs the appraisal depends on the path the house takes:
- Probate. The inventory goes to a probate referee designated by the court, as explained in Step 3.
- No probate. This covers trust administrations, joint tenancy transfers and community property passing to a spouse. Here the successor trustee or the family usually engages a licensed real estate appraiser directly.
The California Bureau of Real Estate Appraisers says on its About BREA page that it licenses and certifies real estate appraisers. It also says it investigates complaints of violations of national appraisal standards against licensed appraisers.
An online estimate or a broker price opinion is not an appraisal. A broker price opinion is an agent's view of likely sale price. Neither is prepared by a licensed appraiser to appraisal standards. Families who use one alone for basis or probate purposes may find it questioned later. Federal tax rules set appraisal standards for some purposes, and a CPA or tax attorney can say whether a particular appraisal meets the standard that applies.
Early on, a rough figure is enough. The California Courts' page says you do not need anything appraised at the start and can give an estimate. It adds that if you go to court later, you may need a formal appraisal.
Step 3: The Probate Referee Process (When Probate Is Required)
When the house goes through probate, the family usually does not choose the appraiser for the inventory. A court-designated professional appraises it instead. For many families, that removes one decision from a long list.
In a probate case, the personal representative prepares an inventory and appraisal of the estate. The California Courts' guide to property after someone dies describes the personal representative as the person responsible for representing the estate in probate. That person may be the executor, who is named in the will, or an administrator, who is appointed when there is no will or the named executor cannot act. For an administrator, Probate Code section 8461 sets an order of priority. It begins with the surviving spouse or domestic partner, then children, then grandchildren, and the list continues.
Under Probate Code section 8900, property in the inventory is appraised by the personal representative, the probate referee or an independent expert, as that chapter provides. Probate Code section 8902 says that, except as otherwise provided by statute:
- the personal representative delivers the inventory to the probate referee designated by the court, with the supporting data the referee needs
- the referee appraises all property the personal representative does not appraise
The probate referees come from the State Controller. The California State Controller's Office Probate Referees page says the Controller appoints probate referees to appraise all types of estate assets. It says referee service is required for court resolution of an estate and is also available for non-probate trust administration, though under Probate Code section 8902 the referee's role applies except as otherwise provided by statute.
The referee's value sets the house's value for the probate inventory. Families often also use it as the date-of-death value for basis, and a CPA can confirm whether it fits that purpose. The Probate Code sets a deadline for filing the inventory and appraisal, and the attorney handling the probate usually tracks it. The referee's fee is set by law, and the attorney can explain how it is paid.
Step 4: California Property Tax Reassessment and the Proposition 19 Rules
Property tax is a separate question from income tax, handled by a different office. The county assessor deals with property tax. A CPA deals with basis.
A transfer at death is generally a change in ownership. When ownership changes, the assessor reassesses the house at its current market value, and that can raise the annual tax bill. For purchases or transfers on or after February 16, 2021, Rev. & Tax. Code section 63.2 lets certain transfers be excluded, in whole or in part, from that reassessment. These are transfers of a principal residence between parents and children. They also include transfers between grandparents and grandchildren, if all of the grandchild's parents, other than stepparents, who are the grandparents' children are deceased as of the date of the transfer. "Children" is defined to include, among others, stepchildren and sons- and daughters-in-law, with conditions.
The exclusion comes with conditions:
- It is not automatic. No exclusion is allowed unless a claim is filed with the assessor.
- It covers only the family home. The house has to have been the transferor's principal residence and become the heir's principal residence within one year of the transfer. The heir must also file for the homeowners' or disabled veterans' exemption within a year.
- It has a value cap. The exclusion keeps the prior taxable value only up to a limit set in the statute. If market value exceeds the prior taxable value plus that amount, the excess is added. The county assessor's office can confirm the figure that applies to a given transfer.
When to file: the claim generally has to be filed within three years after the transfer. It must be filed sooner if the house is transferred to a third party first or the eligible heir stops living there, whichever comes first. A claim filed within six months after the mailing of a supplemental or escape assessment notice issued because of the transfer is treated as timely. If the house has not been transferred to a third party, a later claim may still be considered, but any exclusion applies only from the lien date of the year the claim is filed. If the assessor writes about potential eligibility, Rev. & Tax. Code section 63.2 sets 45-day and 60-day response windows. A processing fee of no more than $175 may apply in that case.
How Proposition 19 affects a decision to keep, rent or sell is the subject of keep or sell decisions.
Step 5: When Multiple Heirs Own the House Together
Sharing a house with siblings can be the hardest part. The valuation itself is usually the simpler piece.
When a house passes to two or more heirs, each heir typically holds a share of the whole. That is true whether the house passes through a will, a trust or the rules that apply without a will. A single appraisal covers the whole property, and each heir's share of the value follows their ownership percentage. Because 26 U.S.C. § 1014(a) ties basis to the date-of-death value, each co-owner generally starts from the same value for their share.
Co-owners then decide together whether to keep, rent or sell. For a sale, everyone with authority has to join. Who holds that authority depends on how title is held and whether a probate or trust administration is open. If co-owners cannot agree, a partition action in Superior Court is a contested matter handled by an attorney who litigates these cases. Options for an inherited house with siblings are a common next question. So is what a later sale means for taxes when selling an inherited house.
Families weighing a sale often compare listing with an agent against a cash sale. A cash sale can reduce repairs, showings, financing uncertainty and time, but whether it fits depends on each family's circumstances.
Typical Timeline and When the Process Gets Complicated
There is no single timeline. A privately ordered retrospective appraisal depends on the appraiser's schedule and the property, and the appraiser can give an estimate when engaged. In probate, the referee's appraisal moves with the court case. A trust administration without probate often avoids the court calendar. The valuation steps are the same either way: an appraisal and, where it applies, a reassessment exclusion claim.
Title is unclear or disputed
If the deed and the estate documents do not match, valuation may wait until ownership is sorted out. A dispute over who owns the house is a contested matter for a litigation attorney.
Property in another state
A house located outside California is governed by that state's law.
Condition affects value
Deferred maintenance or damage on the date of death matters, because the appraiser values the house as it stood then. Comparable sales in better condition may need adjustment.
Federal estate tax may apply
Where an estate return may be needed, the executor works with a tax attorney or CPA on timing and on any alternate valuation election.
