All Entries Tagged With: "assessment"
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...
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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 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.
California Commercial Property Type Office
Below is an actual Assessment Appeals Board Case presented in Los Angeles County in March of 2000 for a 1998 appeal. Certain information has been removed.
Appeal #98-xxxxx
March 14, 2000
APN: 2163-xxx-xxx
ADDRESS: xxx Ventura Blvd.
CITY: Tarzana
USE: Stores & Offices (Strip Mall)
SUBJECT
The Subject consists of a four unit strip mall located on Ventura Blvd. in Tarzana. Built in 1985 it has 11,720 square feet on a single story.
The site upon which the property is situated is ill-suited for this type of property. Measuring 75′ X 182′ it has only 75 feet of frontage on the street and is deep back off the street. This functional obsolescence has made renting the property difficult. In 1997 and most of 1998 there was only one unit rented for $1,750 per month. ‘97 income was only $21,000 and ‘98 was 27,034.
COMPARABLE PROPERTY SALES
The following sales have been recorded in the time period of this valuation:
Comp #1
This comparable sold in October of 1996 for $550,000 and is located approximately 5 miles….
Comp #2
Located approximately 1 mile from the subject this comp sold in February of 1998 for $528,000 and was ….
Comp #3
This comparable sold in September of 1996 at a Trustees Sale and is listed solely for….
ADJUSTMENTS
ADJUSTMENT COMP#1 COMP#2 COMP#3
Site -25% -25% -25%
Size -20% -25%
Total Adjustments -25% -45% -50%
INCOME
The subject had ‘97 income of $21,000 and ‘98 was 27,034. Using even the higher income and actual expenses of $7139 yields capitalized income of only $19,895…..
RECONCILIATION
As shown above values in the subject area after adjustment range from $59 to $65 per square foot. We have chosen $60 per square foot as fair market value as of the 1/98 lien date.
11,720 Square feet X $60 = $703,200
Market Approach $735,000
Income Approach $675,000
1/98 Fair Market Value = $700,000
