But my neighbor pays less than me in property taxes

Something must be fishy if your model match neighbor is paying less in property taxes than you, right? Not necessarily. Is this a point you should bring up during a property tax appeal? It’s really not a strong point because your neighbor Joe could have purchased at a different time than you, and the difference in sales price will result in a difference in taxes paid each year. All things considered, if Joe purchased in 2002 at $247,000 and you bought an identical home in 2008 for $505,000, Joe is going to be paying about half as much in taxes than you do because of Proposition 13 in California. Assuming you purchased your home at a fair market value, your purchase price will most likely be the “Proposition 13” value (also called the “base year value”). This means subsequent years of taxation will be based upon that value level – $505,000. If the market declines, then the assessor may issue a temporary decline in value under “Proposition 8” (the real estate prop – not the marriage one), but that still does not take away the original $505,000 Proposition 13 base year value. If the market improves over time, your property taxes can still return to that level. That’s not going to happen for quite some time though in the Sacramento area.

Good or bad advice? I sometimes hear advice from real estate professionals for home owners to make a list of what neighbors pay in taxes, but this isn’t good advice to follow for reasons listed above. The Assessor even states on their website that “only open market sales that occurred before March 31, 2011, can be used to review your 2011-12 value” (not your neighbors taxes). While it may seem to be a secondary form of value support in certain cases, the best thing you can do is provide solid comparable sales between January 1 – March 31 of the given year. Or even provide sales between September to December of the previous year in addition to January to March. Hard facts such as sales from the market are worth way more than saying “but Joe next door pays less than me and I should pay less too”.

If you have any questions or you need help with the tax appeals process in Sacramento County or a surrounding area, let me know. I run a property tax appeal company and I’m always happy to help answer questions.

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

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