Property Tax Redux

Please read the disclaimer first.

We went to the next workshop, and this time, it wasn't cancelled.  :)

The presenter, Pat Martinez, was a jolly lady.

There were only five other people who attended the shop, so we were able to go through a nice, targeted session.

(She said the room was packed in 2009.)

First, we were explained how our assessed value can go up 25% in one year.

Prop 13 caps the value to the purchase time with 2% an year compound.

This means that theoretically, they can push it up to 117% of the 2006 value in our case.

To get to the market value, the assessor will find closed sales of like properties, up until the 90th day of the calendar year.

If they use prior year sales, they will adjust the value with the market condition changes.

To make an appeal, you will go through the same process with three properties.

If you decide to make an appeal, you need to file an "Application for Changed Assessment".

Make sure to ask for somebody in the appeals division, whom you can exchange information with.

This is so you can prepare well for the hearing.

When you schedule a hearing, you will need to decide whether to go with a Hearing Officer or Assessment Appeals Board.

For simple stuff like residential property that hasn't physically changed, pick a Hearing Officer.

For complicated appeals, like commercial properties, or if you have remodeled, you should talk to the Assessment Appeals Board.

This is because they need to go through a lot more information.

For evidence, it is always a good idea to take pictures.

This means if you plan to remodel, always take what the property looked like before anything has started.

Always bring 6 copies of everything to the hearing, to be safe.

If you do not agree with the final decision, you can appeal to the Superior Court, but it is usually not worth it.

One last thing to consider is the return on effort.

The tax rate depends on the city, but it is roughly 1%.

This means you only get about $10 in saving for every $1K lowered.

Property tax is also deductible on your tax return, so effectively it could be even lower if you itemize.

So net-net, you may be better off spending your time flipping burgers.  :)