(Property) Tax Day
It's April 10, that cruel day just five days before income tax day when property owners have to make the second payment on their 2008-2009 property taxes. This year, about a one-third of those property owners will be making a payment lower than the one they made last April. This is due to the County Assessor taking into account the drop in property values during 2007. No, that isn't a typo--I meant 2007, not 2008.
Your current assessed value is based on the value of your home on January 1, 2008. This is because the assessor has to prepare taxable values during 2008 in order to meet the July 31 deadline for fixing values, which are then reflected in the property tax bill you receive in late fall. In the next fiscal year (2009-2010) property values will be based on the January 1, 2009 values. Given the massive drop in property values in 2008, the County Assessor expects far more properties to get tax reductions this year.
Some of you may ask, "if all property values are dropping, why doesn't everyone receive a reduction in taxes?"
Well, the assessed value of your property is not the market value of your property. When you purchase your property, the assessed value is set. Each year thereafter, the assessor cannot increase the assessed value of your property more than 2 percent. Thus, if property values are rising more than 2 percent per year, your assessed value is not keeping up with market value. However, with the current huge drop in values, there are likely to be very few properties that don't receive a reduction in value.
The reduction in value is often referred to as a Prop 8 adjustment. This is a quirk of the tax law that states that you can temporarily reduce the value of a property below its current assessed value. However, as property values go up, it can then go up in assessed value more than 2 percent a year. But, it can never go up beyond the value that it would have been if values had never dropped. Thus, if you received a reduction the past few years, you may see your property taxes go up more than 2 percent a year in the future.
Your current assessed value is based on the value of your home on January 1, 2008. This is because the assessor has to prepare taxable values during 2008 in order to meet the July 31 deadline for fixing values, which are then reflected in the property tax bill you receive in late fall. In the next fiscal year (2009-2010) property values will be based on the January 1, 2009 values. Given the massive drop in property values in 2008, the County Assessor expects far more properties to get tax reductions this year.
Some of you may ask, "if all property values are dropping, why doesn't everyone receive a reduction in taxes?"
Well, the assessed value of your property is not the market value of your property. When you purchase your property, the assessed value is set. Each year thereafter, the assessor cannot increase the assessed value of your property more than 2 percent. Thus, if property values are rising more than 2 percent per year, your assessed value is not keeping up with market value. However, with the current huge drop in values, there are likely to be very few properties that don't receive a reduction in value.
The reduction in value is often referred to as a Prop 8 adjustment. This is a quirk of the tax law that states that you can temporarily reduce the value of a property below its current assessed value. However, as property values go up, it can then go up in assessed value more than 2 percent a year. But, it can never go up beyond the value that it would have been if values had never dropped. Thus, if you received a reduction the past few years, you may see your property taxes go up more than 2 percent a year in the future.
Labels: Taxes
posted by City Manager @ 3:13 AM
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