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Property Tax Frequently Asked Questions
Q: What is assessed value?
A: The assessed value is what your taxing authority (your county, city or town) uses to determine how much tax is due. In some cases, the assessed value might be the same as market value, but typically it is a percentage, called the assessment ratio.
Q: How is assessed value used to calculate my tax bill?
A: The specifics vary among different localities, but generally, the taxing authority calculates a percentage of what it considers to be the market value of your home. For example, if the assessed value were 30 percent of the market value, a house that might sell for $90,000 would be taxed at an assessed value of only $30,000. If the tax rate were 1 percent of the assessed value, the annual tax bill would be $300.
Q: How reliable is the assessed value or market value?
A: Again, that depends on a number of factors, including when the assessment was made, whether accurate information about the property was used, and the differences among specific assessment procedures.
Q: How often is my home assessed for tax purposes?
A: The period between assessments varies by jurisdiction. Some taxing authorities might conduct full assessments every 6 years, for instance, but update their records annually to account for new homes or building improvements.
Q: Can I challenge the tax assessment?
A: Yes, and you should if you believe the taxing authority has inflated the market value of your property. The best way to challenge the valuation is to hire a certified appraiser to recalculate the market value. Or, if you bought your house recently and the sale price was less than the assessed market value, a copy of the sales contract would bolster your position. In any event, contact your local tax assessor to learn how to appeal your tax bill.
Q: If I appeal my taxes, could they go up?
A: Possibly. If your local taxing authority decides your property is actually undervalued, then yes. On the other hand, you can avoid that by having a professional appraisal before you file an appeal. Remember that an appraiser is not an advocate, so don't expect him or her to lowball the value of your property. See Appraisal FAQs for more information.
Q: What is the property Tax Fiscal year?
A: Fiscal year for Property tax starts on, July 01, of each year and ends on June 30, of the next year.
Annual Property tax becomes a lien on the property at January 01, of each year.
The Annual property tax can be paid on two installments: The first installment becomes due on November 01, of current year and becomes delinquent on December 10, of current year if it is not paid. The second installment becomes due on February 01, of the next year and becomes delinquent on April 10, of the next year if it is not paid.
Property Assessed Value
An assessment is basically an estimate of what a piece of property is worth. This valuation of the property helps decide what part of the local property tax levy will be billed to the property. Once this has been determined, the value is multiplied by the tax rates, sometimes known as the "mill rate," to determine how much tax the owner must pay on that piece of property. Many states use full market value (or a fraction of it) as a basis for their assessments.
Assessors "value" property for tax appraisal purposes. "Value" is also known as the following:
Actual value
Appraisal value
Fair and reasonable market value
Fair cash value
Full and fair value
Full value
Just value
Market value
True value
Despite these similar terms, most states focus on "market value." Market value is the amount of money a typical, knowledgeable, buyer (unrelated to the seller) would pay for a given parcel of property. To calculate the market value of a piece of property, an assessor will determine if there have been changes in the real estate market where the property is situated. The assessor will examine what different types of property are selling for, local construction costs, normal operating expenses like utilities, nearby rental rates, and inflation. Changes in these factors may change the assessed value of the property.
Assessing Personal Property
To make assessments of most personal property, appraisers use information contained on personal property statements filed by the property owner. If the property owner does not provide information about the value of his or her personal property, the assessor estimates the property's value using acceptable appraisal data and techniques, taking into consideration factors such as the age, cost, and type of property. Depending on the state or locality, tax rates for personal property may be the same as that for real property or may differ.
Assessing Real Property
There are three principal methods for assessing the value of real property. These differ based on the kind of property being assessed.
1. The cost (or replacement) method. This method is used for assessing buildings or other structures. Assessors estimate how much it would cost, using current rates for material and labor, to replace a given structure. An assessor will deduct the reasonable depreciation of the property but add the value of the land. This approach is most appropriate when the assessment is of a new and unique or specialized property. It is also useful when there are no meaningful sales of comparable properties.
2. The income method. Under this method, assessors estimate the amount of income from a piece of property if the property is used to produce an income. This method is used for apartments, stores, warehouses, shopping centers, and office buildings. To arrive at an assessment, the assessor considers the business taxes, the amount of income the property may generate, insurance costs, rates of vacancy, operating expenses, maintenance costs, and the current interest rate charged for borrowing money for making improvements or repairs on such a property.
3. The market or sales comparison method. Here, sales of similar properties are compared to each other and adjusted for differences. Most residential real estate is appraised by using the market or sales comparison method.
Most states appraise various classes or types of real estate using other approaches to value. For example, farmland or timberland may be appraised on its use or level of productivity. Business inventories may be assessed on the basis of the business's records, as well as the state of its machinery and equipment. And assessors may even combine approaches to arrive at a fair appraisal of a piece of property.
Taxpayers have a right to fair appraisals. Furthermore, no class of property should be over-or under-valued in relation to similar properties within a given area. Even so, it is up to individual property owners to monitor their assessments. To find out which appraisal method was used in a situation owners should contact their local assessor's office.
Property Tax, and Assessed value
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State law mandates that all property is subject to taxation unless otherwise exempted. Your property taxes support necessary services provided to the residents of the County. These include law enforcement, fire protection, education, parks and recreation, and other vital services.
Property taxes are based on the assessed value of your property. Property tax bills show land and improvement values. Improvements include all assessable buildings and structures on the land. It does not necessarily mean that you have recently “improved” your property.
In general, properties that are owned and used by educational, charitable, religious or government organizations may be exempt from certain property taxes. You may also qualify for certain exemptions.
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What Does the Assessor Do? |
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The Office of the Assessor has the following four primary responsibilities:
- To locate all taxable property in the County and identify ownership.
- To establish a taxable value for all property subject to property taxation.
- To complete an assessment roll showing the assessed values of all property.
- To apply all legal exemptions.
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Proposition 13 |
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In 1978, California voters passed Proposition 13, which substantially reduced property tax rates. As a result, the maximum levy cannot exceed 1% of a property’s assessed value (plus bonded indebtedness and direct assessment taxes). Increases in assessed value are limited to 2% annually. Only four events can cause a reappraisal:
- A change in ownership;
- Completed new construction;
- New construction partially completed on the lien date (January 1); or
- A decline-in-value (see Market Value Decline - Prop. 8).
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Change in Ownership Appraisals |
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When a publicly recorded transfer occurs, the Assessor receives a copy of the deed and determines whether a reappraisal is required under State law. The date of reappraisal is generally the recording date of the deed that transfers ownership. However, the reappraisal of property acquired by inheritance from an estate or living trust occurs as of the date of death of the property owner, not as of the date of distribution to the beneficiary. If required, an appraisal is made to determine the new market value of the property.
Upon notification of the new assessment, the property owner has the right to appeal the value if he/she does not agree with it.
The transfer of property between husband and wife, and registered domestic partners does not cause a reappraisal for property tax purposes. This includes transfers resulting from death, divorce, or termination of domestic partnership. Also, the addition of joint tenants, whether related or not, does not result in a reappraisal. In most cases, transfers by irrevocable trusts are reappraisable.
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New Construction Appraisals |
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Copies of building permits are also sent to the Assessor. New buildings, additions, and other structures require an appraisal. Structural repairs and/or replacement are not appraisable in most situations.
The value of new construction is added to the existing improvement assessed value. The new assessed value will not change except for the annual inflation adjustment of up to 2%. As with all newly assessed values, the property owner has the right to appeal the value.
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Supplemental Assessments - SB 813 |
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State law requires the Assessor to reappraise property upon change in ownership or completion of new construction. The supplemental assessment reflects the difference between the new value and the old value. The Auditor-Controller calculates the supplemental property tax, and prorates it, based upon the number of months remaining in the fiscal year in which the event occurred. The fiscal year for property tax runs from July 1 through June 30.
A change in ownership or new construction completion which occurs between January 1 and May 31 results in two supplemental assessments and two supplemental tax bills. The first supplemental bill is for the remainder of the fiscal year in which the event occurred. The second supplemental bill is for the subsequent fiscal year.
Notices of Assessed Value Change are mailed to property owners before supplemental tax bills are issued.
Remember that supplemental tax bills are in addition to the regular annual tax bills. Supplemental bills go directly to the property owner, and not to an impound account - where one might exist. |
Property Tax Exemptions
The following information provides brief explanations of programs available to the County property owners. .
If you own a home and it is your principal place of residence on January 1, you may apply for an exemption of $7,000 from your assessed value. New property owners will automatically receive an exemption application. Homeowners’ Exemptions may also apply to a supplemental assessment if the prior owner did not claim the exemption.
If you are a single veteran with assets of less than $5,000, a married veteran with assets of less than $10,000, or an unmarried surviving spouse of an eligible veteran, you may apply for the Veterans’ Exemption of $4,000 applied to the assessed property value. Although it is unnecessary for the veteran to reside on that property in order to qualify, this exemption claim must be filed every year.
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Disabled Veterans’ Exemption |
If you are a disabled veteran who is blind in both eyes, has lost the use of two or more limbs, or is totally disabled as a result of injury or disease incurred in military service, you may be eligible for an exemption up to $150,000 of the assessed value of your home. The Veterans Administration must certify the veteran’s disability. Unmarried surviving spouses of certain deceased veterans may also qualify.
Property used exclusively by a church, nonprofit college, cemetery, museum, school, or library may qualify for an exemption. Property owned and used exclusively by a nonprofit, religious, charitable, scientific, or hospital corporation may also be eligible. To receive the full exemption, an applicant must file completed claim forms by February 15.
 
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