Cal. Revenue and Taxation Code § 62.3

(a) Notwithstanding any other provision in this chapter, a change in ownership shall not include a transfer of a cotenancy interest in real property from one cotenant to the other that takes effect upon the death of the transferor cotenant if all of the following conditions apply: (1) The transfer is solely by and between two individuals who together own 100 percent of the real property in joint tenancy or as tenants in common. (2) As a result of the death of the transferor cotenant, the deceased cotenant’s tenancy in common or joint tenancy interest in the real property is transferred to the surviving cotenant, which results in the surviving cotenant holding a 100-percent ownership interest in the real property immediately after the transfer, thereby terminating the cotenancy. (3) For the one-year period immediately preceding the transfer, the real property was coowned by the transferor and the transferee, and both cotenants have been the owners of record of that real property. (4) The real property constituted the principal residence of both cotenants immediately preceding the transferor cotenant’s death. (5) The transferor and the transferee continuously resided at that residence for the one-year period immediately preceding the transfer. (6) The transferee has signed, under penalty of perjury, an affidavit affirming that he or she continuously resided with the transferor at the residence for the one-year period immediately preceding the transfer. (b) A transfer of cotenancy interest in real property from one cotenant to the other shall take effect upon the death of the transferor cotenant under any of the following circumstances: (1) Pursuant to the transferor cotenant’s will or trust, upon the death of the transferor cotenant. (2) Through intestate succession from the transferor cotenant. (3) By operation of law, upon the death of the transferor cotenant. (c) The exclusion provided by this section shall not apply to any transfer of real property interests for which a separate exclusion in this chapter applies. (d) For purposes of this section, both of the following apply: (1) “Cotenancy interest” means an interest in real property held only as tenants in common or joint tenants. (2) “Principal residence” means a dwelling eligible for either the homeowners’ exemption or the disabled veterans’ exemption. (e) This section shall only apply to transfers that occur on or after January 1, 2013.