Ten Things You Should Know About Your Property Taxes

Many people, including some real estate professionals have misconceptions about their property taxes. To help you better understand property tax laws in California, here are ten things that every property owner should know property taxes.

1. Real property can only be reassessed if there has been a change in ownership, new construction or a decline in value.
2. If you own and occupy your home, you may qualify for a homeowner’s exemption on your property.  This is currently a $7,000 reduction in the assessed value of your home.
3. Remodels, repair and replacement of existing items on your property do not cause a reassessment of your property unless you have renovated it to be the equivalent of a new building. Additions will be assessed at fair market value.
4. Refinancing generally will not cause a reassessment of the property.
5. Transfer between spouses will not cause a reassessment of the property.
6. Declines in value due to a natural calamity (e.g. fire, flood, earthquake), or due to market conditions, can reduce your property assessment temporarily until the condition is remedied.  Applications for a reduced assessment must be made with your county assessor.
7. Supplemental assessments are made whenever there is a change in ownership or new construction occurs.  These are in addition to your annual tax bill.  These bills are not normally paid through your impound account, if you have one.
8. Transfers of property between parents and children, or between grandparents and grandchildren, may be excluded from reassessment if an application is filed with the County Assessor and certain conditions are met.
9. If one owner of your residence is age 55 or older, and you purchase a another residence of equal or lesser value within the same county, you may transfer your property tax base from your old home to your new one.
10. If you feel that your property is assessed too high, you can file an appeal with your County’s Assessment Appeals Board.  Typically, you must file this appeal within 60 days of receiving your tax bill.

If you have recently purchased property at a sales price that is significantly lower than the current assessed value, you will eventually receive a supplemental assessment reflecting a new, lower assessed value.  Unfortunately, in most cases, you must condition to pay property taxes based upon the higher assessment until your property is reassessed.

notes:

1. These comments are excerpts from a talk given by Ken Stieger, Sacramento County Assessor.
2. For specific advice regarding your situation, visit your County Assessor’s office or seek legal advice.