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Craig D Peltier
10-24-2010, 11:56 AM
My rental property in California property tax has risen 3 years in a row while prices fall in the unit. Im uneducated on this subject. Should this be something I should look into to try and lower fairly simply? This year it went up $100 plus.

Steve Peterson
10-24-2010, 2:13 PM
Is the house worth less than the taxable value?

California locks in the base price (value) when you buy your house. The taxed value is only allowed to increase 2% per year. The taxes are capped at 1% of the value per year, although there are often a few small taxes for street lights or library fees. The taxable value can go down if the house is worth less than what you paid.

But, if you bought the house over 10 years ago, then the house might still be worth more than you paid because of the huge increases before 2006. In that case, you probably won't be able to lower your taxes.

I bought about 3 years ago, so my house has lost value. The county automatically send an adjustment to lower the taxable value by about 20%. You can also challenge the taxable value and get it lowered even further. The good thing is that once the taxable value is lowered, it can only increase by a maximum of 2% per year.

btw: here is some info from the first link of a quick search on "California property tax rate".
What if I don't agree with the assessed valuation of my property? If you feel the Assessor's valuation is incorrect you should first call the County Assessor's Office and discuss your valuation with an appraiser. If you cannot reach an agreement with them, your next step is to file an appeal with the Assessment Appeals Board in your county. You will find their phone number listed in the County Government section of your local telephone directory. Please be aware that there is a limited window of opportunity to file an appeal; be sure you meet the deadlines.

Steve

Brian Elfert
10-24-2010, 4:39 PM
Does California still lock in the base value on rental property?

I am in Minnesota and here the property tax is collected by the county. The county sends my property tax statement around the 3rd week of March which also includes the taxable value for the next year. There is an process to appeal the value, but there is only one opportunity a year about three of four weeks after tax statements are mailed. The assessors are available for two days to take appeals. If you have an appraisal or something solid the value will often be dropped on the spot. If you simply say your house is valued too high because the neighbor's house sold for a low price they will probably have to do more research.

I have appealed my value three times and won all three times. Once was when I bought the property for less than the assessed value. The other two were after appraisals showed the value less than assessed value. My taxable value has gone down the past two or three years as the market has tanked.

Joe Pelonio
10-24-2010, 6:30 PM
When a previous CA real estate recession (not as bad) took place back about 1991, a friend of ours had just bought a new home for about $440,000. Withing 6 months it was worth a little over $300,000. He
appealed to Alameda County and got the taxes lowered simply by
filing some forms and paying for an appraisal. While there are state laws governing property taxes the county sets the rate due to local assessments that affect it.

This is from the Alameda county Assessor's Website:

"Review Due to Decline in Value

The Assessor's Office is required to lower the assessment of real property to the lesser of its current market value or the factored Proposition 13 base year value as of January 1 of each year. That value is surrendered to the Auditor by July 1 and becomes the basis of the annual property tax billed by the Tax Collector.
The Assessor makes every effort to consider declines in value and to assess all property at the lesser of market value or factored base year value each year without the need for individual owners making an informal request or filing a formal appeal. Informal requests for review are considered individually by certified appraisers and can be filed by the property owner for the current year or the upcoming year. For more information, call (510) 272-3787.

Bryan Morgan
10-24-2010, 9:06 PM
My rental property in California property tax has risen 3 years in a row while prices fall in the unit. Im uneducated on this subject. Should this be something I should look into to try and lower fairly simply? This year it went up $100 plus.


I think it depends on your city. Mine has been going down automatically, thankfully.

Phil Thien
10-24-2010, 10:08 PM
Even if you get relief, it may be temporary.

While you may be able to get your assessment reduced based on market conditions, the fact is everyone is experiencing dropping property values.

Yet, the levy stays the same.

So eventually they may perform a reassessment on everyone, but then turn around and jack the rate up.

glenn bradley
10-24-2010, 10:24 PM
I filed for an adjustment twice and the assessor did it once without my asking over the last couple years. Where I live you can file for an adjustment anytime there is a "significant" change to the value.

Craig D Peltier
10-25-2010, 12:32 AM
Is the house worth less than the taxable value?

California locks in the base price (value) when you buy your house. The taxed value is only allowed to increase 2% per year. The taxes are capped at 1% of the value per year, although there are often a few small taxes for street lights or library fees. The taxable value can go down if the house is worth less than what you paid.

But, if you bought the house over 10 years ago, then the house might still be worth more than you paid because of the huge increases before 2006. In that case, you probably won't be able to lower your taxes.

I bought about 3 years ago, so my house has lost value. The county automatically send an adjustment to lower the taxable value by about 20%. You can also challenge the taxable value and get it lowered even further. The good thing is that once the taxable value is lowered, it can only increase by a maximum of 2% per year.

btw: here is some info from the first link of a quick search on "California property tax rate".
What if I don't agree with the assessed valuation of my property? If you feel the Assessor's valuation is incorrect you should first call the County Assessor's Office and discuss your valuation with an appraiser. If you cannot reach an agreement with them, your next step is to file an appeal with the Assessment Appeals Board in your county. You will find their phone number listed in the County Government section of your local telephone directory. Please be aware that there is a limited window of opportunity to file an appeal; be sure you meet the deadlines.

Steve

Probaly the case where its still worth more than when I bought it which was 2001. So if its locked in from then I understand the increases.
On the other hand the house here taxes should be lowered I will look into that. Its in the escrow acct. it may have been lowered.
Thanks to everyone who helped me understand :)

Brian Elfert
10-25-2010, 10:37 AM
A lot of people think their property taxes should automatically go down because their property value has gone down.

They don't understand that it still costs basically the same amount of money to run government even if home values are down say 25%. Government has trimmed expenses, but it would difficult to cut 25% because of the number of mandates on local and county government. Government can just raise the percentage of home value they charge as home values fall.

There are a lot of political statements that could be made here, but my post would just go bye bye.

Ben Hatcher
10-25-2010, 11:40 AM
...Government can just raise the percentage of home value they charge as home values fall....

As I understand it, here in Ohio, there's a law that prevents the government from doing that, at least for school funding. The amount is based on the values when the levy passed. If prices go up, the millage goes down so that the net income to the district remains constant.

Charlie Reals
10-25-2010, 4:23 PM
I am under prop 13 so I do enjoy lower taxes than those not qualified for it, substantially less. Most around here whom I have talked to who got caught up in the market drop have filled forms out to have them lowered and had no problems.

Ken Fitzgerald
10-25-2010, 4:28 PM
In fact, it depends on the state laws where you reside.

The best information and recommendations you can get are from an attorney who practices in the state where you reside.

BTW...I am not an attorney, didn't have a friend who is an attorney until I met John Keeton here at SMC. No affiliation....no reimbursements.....not employed by an attorney. :D