Legal Question in Real Estate Law in California

It would be a huge financial mistake to add your son to title on your house. You can avoid the Prop. 13 tax increase by filing a form with the deed. However you can’t avoid the gift tax which may be huge if you have a lot of equity. You would also subject him to capital gains tax on any increase in the value since you bought it. If you pass it to him in a trust or by will, the basis resets to the value on date of death and so there are no capital gains taxes on anything but the increase after that if he keeps it after you pass.