In the state of California, there are primarily two triggers for re-assessment: change in ownership and construction. A change in ownership occurs when a deed or deeds are filed at the county Recorder’s Office, the Recorder’s Office will forward the deeds to the Assessor for assessment reasons. The Assessor will then evaluate the change in ownership to determine if it is assessable. If it isn’tassessable then the process stops there, however if it is an assessable transfer it is forwarded to the appropriate staff to determine or review a market value and adjust the base value accordingly. A change in ownership that would not be assessable would need to fall within one of the various exemptions allowed by the State such as a transfer into a revocable trust or an inter-spousal transfer which are all articulated in our Inherited Property and Exemptions Guide which is part of the California Little Black Book.
If a transfer is not assessable meaning it is exempt, the ONLY way the Office of the Assessor knows this is via forms that are recorded with the deed. If no exemption applies, the transfer is assessable per Prop 13. If you do not apply for an exemption, submit a form or offer accepted documentation for an exemption, you will be re-assessed automatically. The Assessor is a mass assessment organization and if you don’t communicate with them through forms and documentation they won’t automatically know how to process your transfer.
The other cause for re-assessment in the state of California based on Prop 13 is construction. The Assessor is notified by the city or county building and safety departments. The city or building and safety send information about issued permits to the Assessor for assessment purposes. Remember, your city also receives some of your property taxes so even though its primarily a state tax your local municipality benefits also. So when construction permits are issued by your city or county even if you don’t end up building, which happens often, the permits are still forwarded to the Assessor. The permit information is given to the real estate appraisers so that they can update the building record and change the taxable value if warranted based on Prop 13. Normally, it takes the Assessors’s Office a fair amount of time to process because field work is necessary to find out what was done to your property and then the valuation procedure follows. If there is a demolition your property taxes will most likely be lowered and if there is an addition the taxable base value will likely go up. For example if you demo a pool your property taxes will decrease. If you add a pool, your property taxes will increase. However, new construction varies from property to property and it will be reviewed based on the value that was created or taken away. This is detailed in the California Little Black Book with examples and various scenarios. While I worked for the Assessor I appraised countless properties where various types of construction was done and would be happy to answer any questions you may have pertaining to this!
Like new construction there will be a re-assessment of a property if the use of it changes. For example if a complex of own-your-owns is converted into condominiums the Assessor will reassess the value of each unit because the change affects the market value of each unit. However, generally in California there are two events that trigger re-assessment based on Prop 13: change in ownership or new construction.
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.
|
|