In the state of California if you sell your house to your children there would be no property tax reassessment as compared to if you were to sell it in general. If you are in a situation where you have two children who you willed the house to fifty fifty a piece and then one sells out to the other then all the necessary savings will be lost. And because of the issue of the forced sale the one who bought it will have to pay the property taxes after it has been reassessed.
This would then force the sibling to have a high tax burden on his or her shoulder, but there are different ways to get around this matter. One of the ways of doing this is by willing your home to the particular child who really needs it, but this can cause some very serious issues involved with the willing of the house and the sharing of certain assets between the children and even separate them from that time on. But in certain situation the child who looks to need it right now maybe won’t by the time you have passed away.
So to be on the safe side you should will the home to one child and then give all the financial assets to the other child, this could also cause some serious problems between them as well. And you can also set up a revocable living trust so the house can be mortgaged and the seller get the proceeds from the loan this equalizes the distribution and also prevents the property from being reassessed to create a higher tax.