Property tax confusion for houses that sell for much less than what owner paid

[SHILOH]

“I believe that Prop 13 prevents increases in your initial assessment so long as you are the owner. I do not believe you even have to live in the property for this protection.”

Can someone comment more on this…does this mean your taxes are only on the amount you payed — and stays the same every year as long as you own the property? How would the city make any money with inflation?

[patientlywaiting]

Here is an example.

Rate 1.20%

Year Assess P13_Max Market Tax
1 500,000 500,000 500,000 6,000
2 510,000 510,000 600,000 6,120
3 500,000 520,200 500,000 6,000
4 400,000 530,604 400,000 4,800
5 450,000 541,216 450,000 5,400
6 500,000 552,040 500,000 6,000
7 550,000 563,081 550,000 6,600
8 574,343 574,343 600,000 6,892
9 570,000 585,830 570,000 6,840
10 597,546 597,546 600,000 7,171

Maximum increase in tax assessment is 2% compounded annually.

You can appeal to market. And assessor can reassess to market or maximum assessment. In reality it’s not always that automatic.

For example, in years 3, 4, and 9, you need to appeal to get a reduction in taxes.

It’s always better to start with the lowest tax basis because that affects your maximum tax assessment.

Edit: It didn’t come out right. The 3rd column is the maximum Prop 13 max.

[patientlywaiting]

Here is an example.

Rate 1.20%

Year Assess P13_Max Market Tax
1 500,000 500,000 500,000 6,000
2 510,000 510,000 600,000 6,120
3 500,000 520,200 500,000 6,000
4 400,000 530,604 400,000 4,800
5 450,000 541,216 450,000 5,400
6 500,000 552,040 500,000 6,000
7 550,000 563,081 550,000 6,600
8 574,343 574,343 600,000 6,892
9 570,000 585,830 570,000 6,840
10 597,546 597,546 600,000 7,171

Maximum increase in tax assessment is 2% compounded annually.

You can appeal to market. And assessor can reassess to market or maximum assessment. In reality it’s not always that automatic.

For example, in years 3, 4, and 9, you need to appeal to get a reduction in taxes.

It’s always better to start with the lowest tax basis because that affects your maximum tax assessment.

Edit: It didn’t come out right. The 3rd column is the maximum Prop 13 max.

[patientlywaiting]

Here is an example.

Rate 1.20%

Year Assess P13_Max Market Tax
1 500,000 500,000 500,000 6,000
2 510,000 510,000 600,000 6,120
3 500,000 520,200 500,000 6,000
4 400,000 530,604 400,000 4,800
5 450,000 541,216 450,000 5,400
6 500,000 552,040 500,000 6,000
7 550,000 563,081 550,000 6,600
8 574,343 574,343 600,000 6,892
9 570,000 585,830 570,000 6,840
10 597,546 597,546 600,000 7,171

Maximum increase in tax assessment is 2% compounded annually.

You can appeal to market. And assessor can reassess to market or maximum assessment. In reality it’s not always that automatic.

For example, in years 3, 4, and 9, you need to appeal to get a reduction in taxes.

It’s always better to start with the lowest tax basis because that affects your maximum tax assessment.

Edit: It didn’t come out right. The 3rd column is the maximum Prop 13 max.

[patientlywaiting]

Here is an example.

Rate 1.20%

Year Assess P13_Max Market Tax
1 500,000 500,000 500,000 6,000
2 510,000 510,000 600,000 6,120
3 500,000 520,200 500,000 6,000
4 400,000 530,604 400,000 4,800
5 450,000 541,216 450,000 5,400
6 500,000 552,040 500,000 6,000
7 550,000 563,081 550,000 6,600
8 574,343 574,343 600,000 6,892
9 570,000 585,830 570,000 6,840
10 597,546 597,546 600,000 7,171

Maximum increase in tax assessment is 2% compounded annually.

You can appeal to market. And assessor can reassess to market or maximum assessment. In reality it’s not always that automatic.

For example, in years 3, 4, and 9, you need to appeal to get a reduction in taxes.

It’s always better to start with the lowest tax basis because that affects your maximum tax assessment.

Edit: It didn’t come out right. The 3rd column is the maximum Prop 13 max.

[patientlywaiting]

Here is an example.

Rate 1.20%

Year Assess P13_Max Market Tax
1 500,000 500,000 500,000 6,000
2 510,000 510,000 600,000 6,120
3 500,000 520,200 500,000 6,000
4 400,000 530,604 400,000 4,800
5 450,000 541,216 450,000 5,400
6 500,000 552,040 500,000 6,000
7 550,000 563,081 550,000 6,600
8 574,343 574,343 600,000 6,892
9 570,000 585,830 570,000 6,840
10 597,546 597,546 600,000 7,171

Maximum increase in tax assessment is 2% compounded annually.

You can appeal to market. And assessor can reassess to market or maximum assessment. In reality it’s not always that automatic.

For example, in years 3, 4, and 9, you need to appeal to get a reduction in taxes.

It’s always better to start with the lowest tax basis because that affects your maximum tax assessment.

Edit: It didn’t come out right. The 3rd column is the maximum Prop 13 max.

[jonnycsd]

Apparently nothing in Sacramento can be simple. Here is the text of 13A:

http://www.leginfo.ca.gov/.const/.article_13A

The 2% cap on increases is in Section 2(b). As worded, assessment increases are based on CPI rather than house prices.

Clearly CPI inflation will be more than 2% a year for quite a while. I guess if the politicians get backed into a budget corner they could try raise every property’s assessment 2% per year even though asset valuations are going down.

[jonnycsd]

Apparently nothing in Sacramento can be simple. Here is the text of 13A:

http://www.leginfo.ca.gov/.const/.article_13A

The 2% cap on increases is in Section 2(b). As worded, assessment increases are based on CPI rather than house prices.

Clearly CPI inflation will be more than 2% a year for quite a while. I guess if the politicians get backed into a budget corner they could try raise every property’s assessment 2% per year even though asset valuations are going down.

[jonnycsd]

Apparently nothing in Sacramento can be simple. Here is the text of 13A:

http://www.leginfo.ca.gov/.const/.article_13A

The 2% cap on increases is in Section 2(b). As worded, assessment increases are based on CPI rather than house prices.

Clearly CPI inflation will be more than 2% a year for quite a while. I guess if the politicians get backed into a budget corner they could try raise every property’s assessment 2% per year even though asset valuations are going down.

[jonnycsd]

Apparently nothing in Sacramento can be simple. Here is the text of 13A:

http://www.leginfo.ca.gov/.const/.article_13A

The 2% cap on increases is in Section 2(b). As worded, assessment increases are based on CPI rather than house prices.

Clearly CPI inflation will be more than 2% a year for quite a while. I guess if the politicians get backed into a budget corner they could try raise every property’s assessment 2% per year even though asset valuations are going down.

[jonnycsd]

Apparently nothing in Sacramento can be simple. Here is the text of 13A:

http://www.leginfo.ca.gov/.const/.article_13A

The 2% cap on increases is in Section 2(b). As worded, assessment increases are based on CPI rather than house prices.

Clearly CPI inflation will be more than 2% a year for quite a while. I guess if the politicians get backed into a budget corner they could try raise every property’s assessment 2% per year even though asset valuations are going down.

[patientlywaiting]

jonnycsd, thanks for the link. I didn’t know that the assessment increase were based on the CPI.

I guess that if the CPI were 2% but property values were stagnant the Assessor could increase assessed values. But that would conflict with Prop 8 which allows homeowners to appeal their assessed value back to market.

Do you want to take a crack at reading the language of Prop 8?

[patientlywaiting]

jonnycsd, thanks for the link. I didn’t know that the assessment increase were based on the CPI.

I guess that if the CPI were 2% but property values were stagnant the Assessor could increase assessed values. But that would conflict with Prop 8 which allows homeowners to appeal their assessed value back to market.

Do you want to take a crack at reading the language of Prop 8?

[patientlywaiting]

jonnycsd, thanks for the link. I didn’t know that the assessment increase were based on the CPI.

I guess that if the CPI were 2% but property values were stagnant the Assessor could increase assessed values. But that would conflict with Prop 8 which allows homeowners to appeal their assessed value back to market.

Do you want to take a crack at reading the language of Prop 8?

[patientlywaiting]

jonnycsd, thanks for the link. I didn’t know that the assessment increase were based on the CPI.

I guess that if the CPI were 2% but property values were stagnant the Assessor could increase assessed values. But that would conflict with Prop 8 which allows homeowners to appeal their assessed value back to market.

Do you want to take a crack at reading the language of Prop 8?

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