Land vs improvements change in assessment

[SD Squatter]

I’m puzzled by my latest letter from the county treasurer. After a change-of-ownership tax reassessment the land value almost doubled, while the improvements value was cut almost in half. The total value of the property did not change much.

How is that possible??? It’s exactly the same house with no work done since the last assessment a few months ago. What’s the point?

[Cube]

They’re hedging against you bulldozing the house?

Is the house about 1/3 and the land about 2/3 now? Did somebody swap the fields when they were typing in the reassesment?

[SD Squatter]

The house and the parcel is exactly the same as in the last assessment. As for swapping fields… no idea 🙂

[SD Squatter]

Ok, here are some rough rounded-off numbers:

Old assessment (late 2011, after a foreclosure by the bank):
land: 180k, improvements: 280k total: 460k

New assessment (spring 2012, after a purchase from the bank):
land: 300k, improvements: 150k total: 450k

No changes to the property between assessments (ok, maybe bank did vacuum the dirty carpet that it didn’t even bother to replace).

Some volatile market we’ve got here…

[bearishgurl]

[quote=SD Squatter]Ok, here are some rough rounded-off numbers:

Old assessment (late 2011, after a foreclosure by the bank):
land: 180k, improvements: 280k total: 460k

New assessment (spring 2012, after a purchase from the bank):
land: 300k, improvements: 150k total: 450k

No changes to the property between assessments (ok, maybe bank did vacuum the dirty carpet that it didn’t even bother to replace).

Some volatile market we’ve got here…[/quote]

Even if they reversed it, so what. Let the mistake lie and don’t sweat the small stuff. Your tax bill is the same.

Actually, if you decide to remodel in the future and obtain a permit to increase the footprint, I would think the assessor would add LESS assessment to the finished remodel from your NEW first full tax bill as opposed to the old one (prev owner’s bill?) as they are starting from a lower assessment of the “improvements :-]

[SD Squatter]

Maybe so, but “what-if” I had to file in the future an insurance claim against a loss on the property (fire, earthquake, flood, etc.) Obviously the insurance company has its own appraised value on the house (~300k), but it may change once there is a loss and they send in their lawyer squad to minimize “claim loss”. Should I worry at all?

[bearishgurl]

[quote=SD Squatter]Maybe so, but “what-if” I had to file in the future an insurance claim against a loss on the property (fire, earthquake, flood, etc.) Obviously the insurance company has its own appraised value on the house (~300k), but it may change once there is a loss and they send in their lawyer squad to minimize “claim loss”. Should I worry at all?[/quote]

The county “assessment” has no bearing on what the replacement cost of a particular dwelling is or will be. Hopefully, you have a “replacement value” policy which means the insurance co will replace what was there in case of fire or other calamity, no matter how much it costs.

Earthquake coverage is separate from your homeowner’s policy. If you don’t have a separate policy through the CA Earthquake Authority, your property is not covered for earthquake damage.

[SD Squatter]

[quote=bearishgurl]
The county “assessment” has no bearing on what the replacement cost of a particular dwelling is or will be. Hopefully, you have a “replacement value” policy which means the insurance co will replace what was there in case of fire or other calamity, no matter how much it costs.[/quote]

“Replacement value” from the tax record (150k), or my own claimed assessment value (300k) provided by me when I applied for the insurance coverage? Who will decide “what was there”, once it’s gone up in smoke? I’m sure the insurance company can overspend me on lawyers any day…

[quote=bearishgurl]
Earthquake coverage is separate from your homeowner’s policy. If you don’t have a separate policy through the CA Earthquake Authority, your property is not covered for earthquake damage.[/quote]

Yes, I have just given it as an example. I wonder what percentage of people in SD have that coverage. It seems rather expensive given the real risk of having a catastrophic earthquake here in the next 50 years.

[bearishgurl]

[quote=SD Squatter][quote=bearishgurl]
The county “assessment” has no bearing on what the replacement cost of a particular dwelling is or will be. Hopefully, you have a “replacement value” policy which means the insurance co will replace what was there in case of fire or other calamity, no matter how much it costs.[/quote]
“Replacement value” from the tax record (150k), or my own claimed assessment value (300k) provided by me when I applied for the insurance coverage? Who will decide “what was there”, once it’s gone up in smoke? I’m sure the insurance company can overspend me on lawyers any day…[/quote]

Your policy will tell you what your dwelling is insured for, as well as what your landscaping, outbuilding(s) and pool are insured for. Your policy and any riders will tell you if you have a “replacement value” policy. Even if you do, your dwelling and other improvements will be insured for a particular value … as a guideline.

[quote=SD Squatter][quote=bearishgurl]Earthquake coverage is separate from your homeowner’s policy. If you don’t have a separate policy through the CA Earthquake Authority, your property is not covered for earthquake damage.[/quote]Yes, I have just given it as an example. I wonder what percentage of people in SD have that coverage. It seems rather expensive given the real risk of having a catastrophic earthquake here in the next 50 years.[/quote]I think about 16% of property owners in CA have earthquake coverage and it is really not that expensive. It’s just that the typical deductible for an earthquake policy is about $50K. So, if a policyholder had a total loss (say, $375K) from an earthquake and they didn’t have $50K lying around, they would have to rebuild for $325K. If an earthquake just damages a chimney at a $26K loss, then the policyholder would receive nothing.

Ins Piggs, correct me if I’m wrong, but I believe CA earthquake coverage just mirrors the valuation a property owner’s insurance co has put on their policy and does not have a “replacement value” provision.

[SD Squatter]

Seems like it’s not just me who thinks that paying for an earthquake insurance with a 15% deductible is not worth it.

The earthquake risk in San Diego area is relatively low. A moderate earthquake (like the 5.5 magnitude 2008 Chino Hills) causes mostly minor damage where the deductible kicks in.

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