Proposition 13 and Property Tax Trending
Property tax values in California trend from 0-2% annually, this percentage increase is from on the Consumer Price Index which measures inflation. Generally, Californians pay approximately 1.25% of their assessed value in actual property taxes per year. If a house was acquired for $100,000, the taxable base value would be $100,000. Because you pay about 1.25% of the assessed value, your property tax bill the first year would be about $1,250.
California taxpayers the property tax base value is capped unless there is a re-assessable event, the only change is the two percent trend based on Proposition 13. So the second year the increases would max out at a $2,000 increase based on the 2% limit. The assessed value increases from $100,000 to $102,000 which means the property taxes increase from $1,250 the first year to $1,275 the second year. The 2% increase compounds over time, so the amount that it goes up also increases over time because the assessed value compounds. Some years the percentage is less than 2%, based on the Consumer Price Index.
At times, when specific exemptions apply to your assessed value, it will not increase annually. If a residence has a Proposition 8 decline in value (temporary decline in value because market decline) the value will not trend. The assessed value will be evaluated annually by the Assessor to decide if it should be adjusted. Similarly, if there is a Disaster Relief exemption also called Misfortune and Calamity applied to a residence the assessed value will not increase, instead the Office of the Assessor will visit the property every year to see the property repairs and will either adjust the value or leave it depending on what has been constructed. Also, most exemptions for the disabled and/or veterans do not increase either. Generally, your base value will trend up to 2% per year every year unless an exemption that applies.
Usually most homes in California increase annually and consequently each property owner has an increase in property taxes every year. Over a period of 30 years your assessed value will double. A great example of this is my parents' property which they bought in 1979 for $80,500 and the current assessed value in 2009 for that residence based on the $80,500 30 years ago is $138,783 so in 30 years they went from paying $1,006 per year to $1,734 per year. If you begin with a property tax base of $500,000 in 30 years your assessed value increases to $887,922 meaning you will start off paying $6,250 per year and in 30 years be paying $11,099 per year!
Understanding how lower your property tax base you will save thousands in the long run! If you acquired your home for $500,000 and today your residence is only worth $300,000 you will save thousands! With a $300,000 tax base you will pay $3,750 per year and in 30 years your assessed value will be about $532,753 so you will pay about $6,659 per year in property taxes. Don't settle for the temporary reduction in value the Assessor is offering right now called Proposition 8 Decline in Value. So PERMANENTLY lowering your property tax base by $200,000 will save you EVERY year you own your residence! The California Little Black Book shows you how!
About the Author: Valerie Faltas, Property Tax Expert has been involved in all facets of real estate for over ten years including assessments, appraisals, estates and trusts, investing and much more. She is a Certified Property Tax Appraiser, Licensed Residential Appraiser and a member of the International Association of Assessment Officers. As a real estate investor and advisor she is well versed in all aspects of real estate. To contact Valerie Faltas go to her website: www.propertytaxlittleblackbook.com.
California taxpayers the property tax base value is capped unless there is a re-assessable event, the only change is the two percent trend based on Proposition 13. So the second year the increases would max out at a $2,000 increase based on the 2% limit. The assessed value increases from $100,000 to $102,000 which means the property taxes increase from $1,250 the first year to $1,275 the second year. The 2% increase compounds over time, so the amount that it goes up also increases over time because the assessed value compounds. Some years the percentage is less than 2%, based on the Consumer Price Index.
At times, when specific exemptions apply to your assessed value, it will not increase annually. If a residence has a Proposition 8 decline in value (temporary decline in value because market decline) the value will not trend. The assessed value will be evaluated annually by the Assessor to decide if it should be adjusted. Similarly, if there is a Disaster Relief exemption also called Misfortune and Calamity applied to a residence the assessed value will not increase, instead the Office of the Assessor will visit the property every year to see the property repairs and will either adjust the value or leave it depending on what has been constructed. Also, most exemptions for the disabled and/or veterans do not increase either. Generally, your base value will trend up to 2% per year every year unless an exemption that applies.
Usually most homes in California increase annually and consequently each property owner has an increase in property taxes every year. Over a period of 30 years your assessed value will double. A great example of this is my parents' property which they bought in 1979 for $80,500 and the current assessed value in 2009 for that residence based on the $80,500 30 years ago is $138,783 so in 30 years they went from paying $1,006 per year to $1,734 per year. If you begin with a property tax base of $500,000 in 30 years your assessed value increases to $887,922 meaning you will start off paying $6,250 per year and in 30 years be paying $11,099 per year!
Understanding how lower your property tax base you will save thousands in the long run! If you acquired your home for $500,000 and today your residence is only worth $300,000 you will save thousands! With a $300,000 tax base you will pay $3,750 per year and in 30 years your assessed value will be about $532,753 so you will pay about $6,659 per year in property taxes. Don't settle for the temporary reduction in value the Assessor is offering right now called Proposition 8 Decline in Value. So PERMANENTLY lowering your property tax base by $200,000 will save you EVERY year you own your residence! The California Little Black Book shows you how!
About the Author: Valerie Faltas, Property Tax Expert has been involved in all facets of real estate for over ten years including assessments, appraisals, estates and trusts, investing and much more. She is a Certified Property Tax Appraiser, Licensed Residential Appraiser and a member of the International Association of Assessment Officers. As a real estate investor and advisor she is well versed in all aspects of real estate. To contact Valerie Faltas go to her website: www.propertytaxlittleblackbook.com.
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