County Assessment-Value Appeal
Note about the Assessment Appeal process and County Property Tax procedures
In each county the County Assessor is charged with providing an assessment value for each property. You should understand that the State Board of Equalization (SBE) oversees the administration of the Property Taxes Law Guide for each county. Audits are performed by the SBE regularly in all California Counties to assure compliance. But to receive their maximum share of property tax revenues, counties only have to comply with a percentage of SBE requirements. That means that from county to county the rule of law can be significantly different. For this reason the presentation here is of a general nature and could vary significantly in specific county appeals hearings.
California real and personal property is assessed annually by the Assessor in each county, who then provides the assessment roll to the Tax Collector who prepares the bill to collect the property tax.
When the county assessment for a real property is not correct, and trying to achieve a satisfactory adjustment from the County Assessor fails, there is but one alternative:
California Property Tax Assessment Appeal
In most counties the Assessment Appeal Board is appointed by the County Supervisor to serve a certain term. The appointments can be filled by individuals with real estate or appraisal experience but is many times made up of the spouse of a contributor who has little understanding of real estate or appraisal procedure.
The County Assessment Appeals Board generally had 3 members; however, they may serve with only two if no objection is made. The meeting chambers consist of vastly different settings by county; some meet in the formal Supervisors chambers which is like a courtroom, while others are informal and meet in normal offices. In some counties the County Counsel (attorney) upholds the value in the County case and in others, the Assessor appoints one of the County appraisers to represent the Assessors side.
The normal Assessment Appeal hearing is much like a courtroom scene: the Assessors Representative (AR) is the prosecutor wishing to prove his value correct. The county property tax payer presents his case first, depending on the property and value, and then defends against the questions of the AR, as well as answers questions from the board. The AR then presents his case, after which he defends questions from the property tax payer and the Assessment Appeals Board. Both sides are then given time for closing arguments. The board at that time either makes a determination or takes the matter under submission, sending letters to the parties generally within a week.
Once the Assessment Appeal Board makes a value determination it is generally the end of the process. The only other option is a further appeal in Superior Court with the obvious complications and legal expenses. Generally, only extremely complicated, high dollar cases are appealed at this level. Seek counsel early if you anticipate going this route.
Go to COUNTY PROPERTY TAX APPEAL ACTUAL CASE STUDY
Go to URGENT MESSAGE FOR COMMERCIAL PROPERTY OWNERS 2009
Go to CALIFORNIA PROPERTY TAX FREQUENTLY ASKED QUESTIONS (FAQS)
To speak with one of our Consultants you may call (909) 867-5000 or (888) 678-9TAX. If you prefer, simply fill out the form below and we will contact you at your convenience. Deadlines vary by county, but for most counties it is November 30. Our costs and fee structure is simple: No Savings, No fee! But act now; once deadlines pass you have lost your right to appeal. Do not allow this opportunity to pass without beginning the process. Please call or write today.
County Property Assessment-Proposition 13
The following is a simplified discussion of Proposition 13 and California property taxes in general. It is not a complete Prop 13 explanation but simply an introduction into the California property tax assessment procedures. For a complete understanding of the California property tax Law on a county by county basis, please read the Property Taxes Law Guide and The State Board of Equalization audits (this one is for Contra Costa as an example).
Pre Proposition 13
Before the passage of Proposition 13 California property taxes were raised by an annual assessment of all property located in the state of California. Simply stated California property tax was based on the fair value of your property each year as shown in the assessment on your tax bill. Each year, as California property values increased, so did the value assessment for the property tax payment.
The system worked fine until California property values began to appreciate at an accelerated rate, which then resulted in increasingly higher assessments and increasingly higher California property taxes. People who didn’t change residences or other properties found themselves with escalating California property tax bills with personal income that didn’t follow suit. The California property tax system was broken and the fix was Proposition 13.
Proposition 13
To summarize, before proposition 13 California property taxes were based upon the fair market value of your property each year. Should values increase at a greater than normal rate, so did your California property taxes.
With Prop 13 California property tax law changed extraordinarily as stated in the paragraph from Proposition 13 below:
Section 1. (a) The maximum amount of any ad valorem tax on real property shall not exceed One percent (1%) of the full cash value of such property. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.
This meant that each year the state could collect no more than 1% of the assessed value of California real property. It went on to say that the county assessor could raise the value of the given property no more than 2% annually. As an example, if the value increased 5% this new California property tax law limited the assessment to a 2% increase.
As stated in an earlier page, when a new property is completed (completion of new construction) or when a property is sold (change in ownership) Proposition 13 provides that a base year value be determined. To assist in this determination a rule was created, Rule 2 which stated that in the absence of evidence to the contrary, it would be assumed that fair market value was the price paid in a sale of property made in an arms length transaction between a knowledgeable buyer and a knowledgeable seller neither of which was taking advantage of the other. For the purpose of making a value assessment for California property taxes, if the buyer bought a property for $500,000 from the seller with no extenuating circumstances, then $500,000 would be considered the base your value.
Proposition 13 then stated that each year the maximum assessment increase was the base year +1%. The taxpayers voted, the government cried foul but the vote carried and Proposition 13 was passed.
All went well in the property tax world as properties appreciated and taxes lagged behind until something different happened. Property values began to fall and yet the assessed value continue to be raised by 2% in accordance with Proposition 13. This presented an unforeseen problem with assessments for California property taxes which resulted in a new Proposition.
Go to PROPOSITION 8
If this is enough information and you wish to have your property taxes reduced, please call us immediately at (888) 678-9TAX or fill out the simple form below and we will contact you at your convenience.
Comments or questions are welcome.
County Property Assessment-Proposition 8
Pre Proposition 8
Before Proposition 8 (California property taxes measure) was adapted in late 1978 the voters passed Proposition 13 which held that only a 2% increase in the assessed value could be enrolled by the County assessor for any given year despite the actual amount of increase in the real property value. California property tax payers were very happy with this property tax measure as it limited their property taxes they have to pay each year in the face of an ever appreciating real estate market. But what would happen if the values actually fell?
County property tax payers understood real quick that they had painted themselves into a corner. They had a piece of legislation that said the value of Real property could be raised to more than 2% a year; now they needed something to address property tax values in a declining market.
In 1978, California voters passed Proposition 8, a constitutional amendment that allows a temporary reduction in assessed value when a real property suffers a “decline-in-value.” A decline-in-value occurs when the current market value of real property is less than the current assessed value as of January 1 of a given year.
As an example for California property tax purposes, say your property has a value of $200,000 on January 1. The assessor needs to prepare the property tax value for the upcoming fiscal year, which runs July 1 through June 30 of each year. January 1, prior to the beginning of the fiscal year is the date of valuation for each fiscal year. So on January 1 your property was worth $210,000. But under Proposition 13 the California property tax assessor can only place an assessment $202,000, even though the market value is $210,000.
Taking the same example for California property tax purposes, say your $200,000 property has a value of $190,000 on January 1. Under Proposition 13 your property would still be valued at $202,000. But under the new Proposition 8 the assessor is allowed to enroll the lower of the factored base year value ($202,000) or the current fair market value ($190,000). The assessment should rightfully be $190,000. But is it?
Problems with the System
We’ve shown how the California property tax payer tried to deal with an unfair property tax system. Both Proposition 13 and Proposition 8 attempted to regulate the value of the assessment so that real property owners pay the right California property taxes in both an appreciating and a depreciating market. But notice the wording in the paragraph about Proposition 8:
In 1978, California voters passed Proposition 8, a constitutional amendment that allows a temporary reduction in assessed value when a property suffers a “decline-in-value.”
Notice that the amendment “allows” a temporary reduction. Some County assessor’s have held they are not required to reduce values. Others have been very forthcoming in recognizing the value declines and have been very proactive. But they can never do the job of recognizing individual property valuation changes. So they are held to doing mass appraisal for the most part on housing tracts and across very similar properties. Invariably, some are too high and some are too low. And still there is another problem.
Once the property taxes and the value have been reduced under Proposition 8, the County assessor is charged with raising the California property tax value when the value increases. Once again this is very subjective. The assessor enrolls a value of $195,000 for the coming year. Should it have stayed at $190,000? Should it have dropped further? Should it have been $193,000. All of these answers are dependent upon one person’s opinion of value. Are you content to let the assessor’s office make that determination?
Let’s look at some bigger numbers. In one of our examples of a recent reduction achieved on a property in central California, a $36 million property was reduced to $15 million. That’s an annual property tax savings of $226,000 for our client. Maybe next year the California property tax assessor wants to raise the assessment up to $25 million. Will that be correct? Maybe it should be $22 million. The difference is some $30,000 in California property taxes paid. That’s a lot of money for one man’s opinion.
So there you have it. Under Proposition 13 the value can only be raised 2% per year. Assuming the annual property tax values appreciate greater than 2% there is no dispute. But if the values depreciate there is only one thing to do: fight!
Go to PREPARING THE APPEAL
If this is enough information and you wish to have your property taxes reduced, please call us immediately at (888) 678-9TAX or fill out the simple form below and we will contact you at your convenience.
Comments or questions are welcome.
California Property Tax-A Basic Summary
The following information is presented as a simplified discussion of the law relating to California property taxes. California property taxes under Proposition 13 and Proposition 8 are explained in more detail on subsequent pages.
California property taxes are regulated under the provisions of the Property Taxes Law Guide as provided for in Proposition 13 (Prop 13). This proposition, officially titled the “People’s Initiative to Limit Property Taxation” became law in 1978 after the voters in the state of California were fed up with the high property taxes based on the increases in the valuation of their homes. Soon to follow would be Proposition 8 (Prop 8 ) which would provide for reductions in value when property values decreased.
In simplified language for the purpose of understanding valuation as it pertains to property taxes, all property is valued at its base year value upon the completion of new construction or a change in ownership. Prop 13 holds that once this base year value is determined it can only be raised by 2% each year regardless of how high the actual value of the real property is. In contrast, Prop 8 holds that in any given year where the value on the lien date is less than the enrolled value the assessor may reduce the value. More on Prop 13 and Prop 8 on the following pages.
Under the California property tax system there are many ambiguities. To understand this reality one need only read the report by Eric Miethke, an attorney who wrote a guest commentary for the California Taxpayers’ Association entitled “Why Taxpayers Hate the Property Tax System“. To quote one of his thoughts:
Most practitioners and property tax managers share a common bond: they feel that rather than being a system of adjudicating legitimate disputes, the property tax appeals process has become a system of rubber-stamping assessor values, even when those values are arbitrarily determined.
How could practitioners and property tax managers come to this conclusion? Simply stated, because it is the correct one. The property tax appeals system is inherently unfair, and is designed to provide maximum revenue collection and de minimus due process for taxpayers…
This system of justice is not in a Third World dictatorship, but in California, a state that proudly touts its taxpayer-friendly, pro-business environment. That any taxpayer could ever prevail under this system is the best objective proof we have of the existence of a Supreme Being.
We concur.
Under this property tax system, property taxes are based on the assessor’s opinion of fair market value on the base year date or on January 1 of each year. When a property tax payer or property owner does not agree with the value placed on the role by the assessor’s office, it may be appealed to the Assessment Appeals Board. Once a determination is made by the Assessment Appeals Board it is final. The only further remedy is filing a case in Superior Court.
Go to WHY TAXPAYERS HATE THE PROPERTY TAX SYSTEM
Go to PROPERTY TAX REDUCTION FOR RESIDENTIAL PROPERTIES
Go to PROPERTY TAX REDUCTION FOR COMMERCIAL PROPERTIES
Appeals deadlines are rapidly approaching and once past all opportunity is lost until the following year. Please contact us now at (888) 678-9TAX or fill out the simple form below and we will contact you at your convenience.
Comments or questions are welcome.
Why California Property Tax Associates?
Welcome to the California Property Tax Associates commercial properties website. We dominate Commercial property tax reduction in this State with a long history of success! Click this link if you are seeking information concerning residential real property assessments.
We are the property tax experts in the State of California. We are not accountants or attorneys but many of our clients are, and yet choose California property tax Associates for good reason: we are one of the most successful companies working to reduce property tax assessments in California. Unlike our competitors, we think outside the box!
Why is it necessary to retain a leading edge company with forward thinking, a company that dominates in it’s field? Read the excerpt from an article written by attorney Eric Miethke about the property tax appeals process entitled “Why Taxpayers Hate the Property Tax System”:
“Most practitioners and property tax managers share a common bond: they feel that rather than being a system of adjudicating legitimate disputes, the property tax appeals process has become a system of rubber-stamping assessor values, even when those values are arbitrarily determined.
How could practitioners and property tax managers come to this conclusion? Simply stated, because it is the correct one. The property tax appeals system is inherently unfair, and is designed to provide maximum revenue collection and de minimus due process for taxpayers.”
So you see the need for a company with our kind of experience and thinking. Beginning 20 years ago our principals began working to reduce California property taxes in the form of assessment reduction and appeal throughout the state of California. In county after county, from apartments to commercial shopping centers, vacant land to industrial parks, we have been extraordinarily successful in reducing California Property Taxes for our Clients for only one reason: we think outside the box.
In the State of California property tax is determined under the provisions of Proposition 13 as delineated in the California Property Taxes Law Guide. Each county then has the responsibility to comply with these laws and are subject to audit to ensure compliance. But each county has its own interpretation of these property tax laws and does not need to follow the States guidelines completely. Therefore it becomes very important that county property tax reduction agents and consultants understand the possibilities in each given case.
California Property Tax Associates has vast experience throughout the different Counties in the State of California with a history of success. We use every conceivable strategy to secure the greatest possible reduction in assessed value for each of our clients. And, our experience is not limited to representing commercial property owners because we are real property owners and managers.
Our principals own and manage California real property as well as an international residential development project. We are landlords in our properties with tenants like 7-Eleven, Alberto’s Mexican Food, Dominos Pizza and ColdStone Creamery. We understand commercial property like no other property tax consultant or agent can.
Please go on the the next page for more California Property Tax Information or, to speak with one of our Consultants you may call (909) 867-5000 or (888) 678-9TAX. If you prefer, simply fill out the form below and we will contact you at your convenience. Deadlines vary by county, but for most counties it is November 30. Our costs and fee structure is simple: No Savings, No fee! But act now; once deadlines pass you have lost your right to appeal. Do not allow this opportunity to pass without beginning the process. Please call or write today. Don’t pay more California Property Taxes than you have to.
Comments or questions are welcome.
