5 things to know about property taxes so you don’t get ripped-off

There is honestly some really bad less-than-helpful information floating around out there about disputing property taxes. Today I wanted to share five bits of information to help give honest insight into tax issues. These points are relevant for counties surrounding Sacramento as well as California. I hope this helps.

  1. Tax Values Posted: New assessments for 2013 for most counties surrounding Sacramento will be posted online on the Assessor’s website around July 2013. The new assessment should be based on the value of your home on 01/01/2013.
  2. Image-purchased-by-Sacramento-Appraisal-Blog-and-used-with-permissionExpect an Increase: If you purchased in the past 10 years, there is a good chance your property taxes will be going up this year in light of the market increasing in value during 2012. For instance, say you bought your property for $400,000 in 2007, but the assessment was lowered over the past few years to $250,000 due to Proposition 8, which allows for a temporary reduction in assessed value due to market declines. This year the Assessor may look at your property and give a 10%+ boost or so. In future years if the market continues to increase in value, your property taxes can be adjusted each year until the assessed value gets back up to the original “base year” value at $400,000 when you first purchased. On the other hand if you bought a property many years ago, your assessed value should be based on the value of your home when you purchased instead of market value on January 1, 2013. This means you’ll probably have a standard 2% increase for inflation instead of a huge increase like others may have.
  3. property-taxes-Sacramento-CountyDon’t Hire Someone Right Now: If you need to hire someone to help you appeal your property taxes, don’t do that until the formal appeals period is open for your county. For instance, Sacramento County has an appeals period between July 2 and November 30, 2013 (some counties go from July to mid-September). This means if you get a mailer right now promising to help reduce your property taxes, that’s bogus for two reasons: 1) The appeals period is not even open yet; and 2) New assessments for 2013 have not been revealed, so these companies sending mailers don’t really know if you should appeal or not because they don’t have your 2013 assessed value. However, keep in mind the deadlines for disputing supplemental taxes and escape assessments do operate on a different timeline than typical “decline in value” situations as mentioned above. This is why it’s important to actually read the letters the Assessor sends.
  4. Assessed Value & Your Wallet: Remember that every $10,000 of assessed value equals about $100-125 in property taxes. This means if your assessed value increases by $30,000 this year, that’s going to be $300 to $375 more in taxes.
  5. Image purchased at 123rf dot com and used with permission - 14688774_s - smallerProp 8 Form vs Appeal: Lastly, there are two forms for the appeals process. There is a free form called the “Proposition 8 Decline in Value” form, which is an informal review and NOT an appeal. There is also a form called “The Application for Changed Assessment” that IS an appeal – and costs $30. Contrary to public perception, it is technically NOT free to appeal your property taxes. However, my suggestion is for property owners to try the free Prop 8 route early during the appeals period, but then to file a formal appeal a few weeks prior to the appeals deadline if you have not heard back from the Assessor yet. Read more here.

I hope this was helpful in a small way. Keep me posted if you have any questions and feel free to read more property tax articles in case it’s useful or relevant.

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