How To Deal With The California Property Tax Boom

In the world of California property tax, two lasting strategies are prudent for property owners to pursue: (1) at all times, never pay taxes on more than the market value of the property, and (2) in boom markets, do what you can legally do to avoid a change in ownership. We are finally seeing real recovery from the 2008 property crash, so — for most properties — both strategies above are applicable.

Every year, each of California’s 58 county assessors is required to prepare an annual assessment roll consisting of all taxable property in their county. This year, roll values increased substantially across the state, including in the following counties: Alameda (↑7.08 percent), Contra Costa (↑7.53 percent), Los Angeles (↑6.13 percent), Orange (↑5.89 percent), Riverside (↑5.78 percent), San Diego (↑5.6 percent), San Francisco (↑6.52 percent), San Mateo (↑7.64 percent) and Santa Clara (↑8.67 percent). And, of course, because the numbers represented are countywide, these are “big picture” increases. Most properties are protected by Proposition 13’s 2 percent annual increase limitation, so buried in these statistics is the fact that some individual properties have had their assessments and taxes grow by more than 10 times from prior years’ levels.

Sometimes, these increases are lawful and correct. Other times, they are not. Those that are not lawful or correct generally suffer from one or both of two issues: (1) the improper recognition of a change in ownership or new construction event, or (2) an overvaluation of the real and personal property.

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