Search Results for 'construction'
California Commercial Property Tax Industrial
Below is an actual case from an Industrial Property Appeal that was won in Hayward, California:
APPEAL #1997
January 25, 1999
APN: 475-xxxxx
USE: Industrial
LOCATION: Hayward
AREA: 44,000 Square Feet
The subject property is located in Hayward. Situated on 1.88 acres the property was built in 1992 of concrete tilt up construction and has 44,000 square feet.
MARKET APPROACH TO VALUE
Six comparable property sales were located in Hayward occurring between December of ‘95 and March of ‘97. Because of the diversity of several of these properties, care was taken to adjust the sales price to match the subject. A detail of the characteristics of the comparable properties is located on the next page with comparable number 1 being the most recent and comparable number 6 being the oldest.
COMP #1
Located two blocks from the subject this property was built in 1987 and consists of concrete tilt-up construction. Sold in…..
COMP #2
Located approximately 7 miles North of the subject this comparable was built in 1981 and is also concrete tilt-up construction. The property has….
COMP #3
Located approximately 2 blocks from the subject this comparable was built in 1986 of concrete tilt-up construction. This comparable has…
COMP #4
Located 7 miles North of the subject this property was built in 1975 of concrete tilt-up construction. This comp has….
COMP #5
Located 2 blocks from the subject this property was built in 1974 of concrete tilt-up construction. Located on a ….
COMP #6
Located 4 blocks from the subject this property was built in 1987 of concrete tilt-up construction. This comp has….
ADJUSTMENTS
Using these comparables we have adjusted sales prices from $34 to $42 per square foot. We have chosen the average of $37.50 per square foot as fair market value for the 1997 lien date.
3/97 FAIR MARKET VALUE VIA THE MARKET APPROACH
$37.50 X 44,000 SQ.FT. = $1,650,000
1997 FAIR MARKET VALUE VIA
THE MARKET APPROACH $1,650,000
INCOME APPROACH TO VALUE
Rents for industrial property in the area are shown on the comparable detail on page 2…. The Comp on 4001 Whipple was new construction and the owner was offering a $3.50/sq.ft. Tenant Improvement allowance. As is shown above, rents were in the range of .30 to .39 per square foot Net. For the purpose of our value determination we have used $ .36/sq.ft. as economic rent.
44,000 sq.ft. X .36 = $15,840 X 12 =$190,080
$190,080
VACANCY 5% 9,504
180,576
EXPENSES 5% 9,029
NET INCOME $171,547
CAP RATE 10.2
$171,547 \ 10.2 = $1,681,835
3/97 FAIR MARKET VALUE VIA THE
INCOME APPROACH $1,681,835
RECONCILIATION
MARKET APPROACH $1,650,000
INCOME APPROACH $1,681,835
FULL CASH VALUE $1,665,000
Sacramento County Assessor Office Report Card
Prices Trend Down
The chart to the left shows the dramatic fall in homes listed for sale. The fact that many who wish to sell cannot and so are hidden from the transactional analysis is seldom discussed. The fact of the matter is, the housing market is down and continues to fall, and the commercial market is in the process of following. If you own commercial property and don’t believe this to be true simply go to the top of this page and click one of the property types such as apartments and look at the chart produced by Massachusetts Institute of Technology (MIT). The numbers don’t lie.
As commercial property values fall it becomes increasingly important to protect the bottom line. We have many Sacramento County clients for whom we have saved hundredths of thousands of dollars. Each year we will continue to save them money if values continue to fall. We are the most aggressive Sacramento County property tax company and we fight to secure our clients the lowest possible value under the property tax law.
Sacramento County Property Tax Assessor
Many of our clients and Sacramento County property owners believe the County Assessor will automatically reduce values if warranted. In some cases this happens. But not often and not in a sufficient quantity. The Sacramento County Assessor has a big job to do and overall does it well. Nevertheless there are countless opportunities to see a reduction in assessed value that our clients wish to have in order to protect the bottom line of their company. For our residential property owners it’s much the same. Money saved and not paid to the county is money earned. The Associates at California Property Tax can help you in this endeavor. But first, let’s take a look at the Sacramento County Assessor’s office.
The California State Board of Equalization is mandated by law to audit the office of the county assessor throughout the state of California to assure compliance with the property tax laws. And Sacramento County, the most recent audit produced some interesting results. They are presented here in excerpts from the actual report which can be read in its entirety by clicking here. We wish to point out that in no way are we attempting to slander the assessor’s office. We merely wish to point out that they have the ability to make mistakes, mistakes that can cost you money. We are experts at finding and correcting those mistakes whether they are errors in judgment or factual errors. Let’s look at the report.
In the area of change in ownership, the assessor’s website provides inaccurate information
about transfers of base year value by persons over age 55, and the assessor adds the value of
improvement bonds to sales prices of real property without developing the evidence required
to support the addition.
• The assessor has not enrolled all new decks and patios as new construction at their full cash
value; and he does not obtain copies of building permits from Sacramento County’s
Environmental Health Division.
• The assessor’s California Land Conservation Act (CLCA) program has several shortcomings:
(1) the assessor has not enrolled significant areas of taxable vineyards and nonliving
improvements; (2) he does not use market-derived expense rates when valuing CLCA
property; (3) he improperly classifies irrigation wells as unrestricted improvements on CLCA
property; (4) has not consistently established base year values for trees or vines; (5) he does
not treat restricted CLCA property as a separate appraisal unit; and (6) he inappropriately
issues supplemental assessments on restricted land when there is a change in ownership.
• The assessor has not correctly identified and enrolled parcels of taxable government-owned
land and has not completed the valuation of taxable government-owned properties for the
current roll.
The assessor should revise his possessory interest (PI) procedures in several areas: (1) he
inappropriately reapraises month-to-month tenancies at the airports, marinas, and other
public property as annual changes in ownership; (2) he has not followed rule 21 when
assessing possessory interests created by written agreements with a stated term of possession;
(3) he does not review all private uses at the fairgrounds that may qualify as PIs; and (4) he
incorrectly assesses the possessory interests of a private concessionaire who provide banking
services at a state university.
• The assessor does not send the Right-of-Way Property Statement (Form BOE-571-RW) to
pipeline owners, and he does not maintain pipeline right-of-way assessment records in
accordance with section 401.8.
• The assessor does not correctly determine the appraisal unit for mineral properties as
required by rule 469.
The assessor accepts business property statements that are not BOE-prescribed forms or that
lack a proper signature, and he does not consistently apply the penalty for late filed
statements.
• The assessor does not consistently identify and correctly classify taxable personal property in
apartment complexes, personal property owned by one-way paging companies, or pollution
control equipment financed by state bonds, and does not use Assessors’ Handbook Section
581, Equipment Index and Percent Good Factors, as intended.
• The assessor does not review significant differences found in business property statements
filed by leasing companies.
• In the area of vessel assessments, the assessor does not add a sales tax component to the
suggested values in published vessel value guides, and accepts unsigned vessel property
statements.
• The assessor’s manufactured home assessment program has several areas of weakness: (1) he
does not classify manufactured homes as personal property as required by section 5801; (2)
in one year, he enrolled escape assessments for a group of manufactured homes based on an
inappropriate edition of a published value guide; (3) he incorrectly issues supplemental
assessments for manufactured homes voluntarily converted to local property taxation; and
(4) he inappropriately adds sales tax to used manufactured home values derived from the
NADA appraisal guide when they are resold or voluntarily converted to local property
taxation.
• Some taxable animals have escaped assessment.
=============================End of Report==============================
To restate what we said earlier, we in no way want to have given the office of the assessor in Sacramento County. Overall they do a good job. But there are many, many properties that require constant attention. The Associates at California Property Tax have the time and attention to give to your property. We can ensure that the taxes you pay are the taxes you owe and not a penny more area. We work on a contingency basis, so we don’t get paid unless we perform. You can readily see our feet and our contract by clicking Our Fee. the deadline is coming in just a few short weeks. Contact us today.
Los Angeles County Assessor Report Card
The Los Angeles County assessor’s offices, of which there are many dispersed throughout the county have the responsibility to annually assess each property, both real and personal for the purpose of property tax assessment. How do they do? Let’s see. But first we will make it clear that there are elements of the assessors job that he does very well. Our intent is to simply point out there are many deficiencies in LA County relative to assessment practices.
We present the following from the Los Angeles County Assessment Practices Survey accomplished by the State Board of Equalization dated May, 2008 (the most recent audit): Audit of Los Angeles County Assessor’s Office by the California State Board of Equalization May, 2008
EXECUTIVE SUMMARY (These are the comments from the actual audit by the State Board of Equalization)
…As stated in the Introduction, this report emphasizes problem areas we found in the operations of the assessor’s office…Areas within other programs, however, need improvement…
…However, we found that uncertified staff are processing business property statements; there are no estimates or assessments made for supplies when taxpayers fail to report supplies on their business property statements; and historical aircraft exemptions are being incorrectly granted…
…Moreover, the processing of changes in ownership of certain types of manufactured housing needs improvement, and there are minor problems with the assessment of vessels and animals…
…However, we found that the assessor does not maintain uniformity in document processing… In addition, we found that another district office does not have access to vital records, which are valuable tools for confirming information on deaths, marriages, and births. Instead, the ownership staff contacts the downtown office for such information. This inevitably interferes with production and may lead to incorrect document processing…The assessor should ensure that his staff knows and understands the proper procedure for processing change in ownership documents. The assessor also should provide the proper resources to all district offices so that the staff will be able to operate efficiently and effectively…
We found that the assessor does not determine the fair market value of construction in progress on each lien date as required by section 71. Instead, the assessor’s computer system automatically applies the annual inflation factor to the prior roll value of construction in progress. Upon completion of the construction project, the assessor issues roll corrections for the years in which the construction was still in progress. Section 71 provides that new construction in progress shall be enrolled on each lien date at its full value until the date of completion. Upon completion, the entire portion of the property that was newly constructed shall be reappraised at its full value. Thereafter, the entire assessment shall be subject to the annual inflation factor. It is improper to apply the inflation factor to construction in progress. Taxable government-owned properties misdirected to district offices often are not identified as such…
…Further, appraisers in district offices may not be aware of the special assessment procedures regarding the valuation of taxable government-owned properties. Thus, the misdirection of taxable government-owned properties to district offices often results in assessment errors. For example, many taxable government-owned properties are issued supplemental assessments because they were not identified correctly. By properly directing taxable government-owned properties to the appraiser specialist, improper assessments could be avoided...
We found that the assessor does not issue supplemental assessments for all changes in ownership of taxable possessory interests...
==============End of Report=================================
Again, our intent is not to slander the work of the Los Angeles County Assessor’s Office. Overall, we believe they do a good job for the limited employees they have. But in our 20 years of experience we have discovered many errors and fought many hard fights on behalf of our clients, winning most of them.
If you would like to read the 64 page report from which the excerpts were taken above please click here.
Click Here for Los Angeles County Assessors Office Information
If you own property in Los Angeles County and are considering an assessment appeal, you owe it to yourself to have an experienced knowledgeable company represent you. Don’t get caught up in the rhetoric; the County assessor oftentimes does not represent your best interests. Please call us at (909) 867-5000 directly.
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.
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.
