How much california property tax

how much california property tax

No, it shouldn't keep increasing dramatically each year, just until it gets back up to the theoretical 2% increase limit. Prop 13 limits the tax to 1% plus a 2% increase per year, but if the assessed value goes down you can request that they lower your assessed value, thereby lowering your property tax amount. But that 2% increase each year based on your original purchase price is still going on in the background, and when the assessed value recovers, they can jack it back up to that cap.

For example (making numbers up here):

Purchase house in 2008 for $100,000. Bill in 2009 will be for assessed value of $100,000. In 2010, it will be $102,000. In 2011, it will be $104,040 (with the 2% increase on the previous value of $102,000). In 2012, it will be $106,120.80. In 2013, it will be $108,243.22.

Now, let's say values went down so that it's only worth $90,000 for the 2011 taxes instead of $104,040 so they drop your property tax assessed value to $90,000 for that year. Let's say it's the same for 2012, since the market is still low. But then we have a big pop in values, so for 2013 your house is suddenly worth $110,000. Well, they can't jack your assessed value up to $110,000 but they CAN raise it back up to what it WOULD have been for 2013 based on the 2%/year increases. So they bring your assessed value up to $108,243.22. Prop 13 allows them to catch back up to what they should have been following historical norms of inflation (2%/year), so in this one year period, your assessed value for your property taxes went from $90,000 to $108.243.22. That's over a 20% increase! You're thinking they're screwing you over with a huge jump in property taxes in one year, but really, you've been getting a deal for the last couple years because you were below the permitted cap increase of 2%/year. After that

point, they can only increase it 2%/year. Of course, if they'd valued your home at $100,000 instead of $110,000 then you'd have a 11% increase instead of 20%, and they will still have room under their cap to be able to jack it up some more the next year if values continue to rise. But they can never exceed 2%/year from the year you purchased it.

Here's a chart I made to demonstrate, hopefully it comes out ok (can you make charts in C-D?):

Year -- Value -- Max cap with 2% increase -- Value used for property taxes -- Percent increase from previous year

2009 -- 100,000 -- 100,000 -- 100,000 -- N/A

2010 -- 105,000 -- 102,000 -- 102,000 -- +2%

2011 -- 90,000 -- 104,040 -- 90,000 -- -12%

2012 -- 90,000 -- 106,120.80 -- 90,000 -- 0%

2013 -- 110,000 -- 108,243.22 -- 108,243.22 -- +20%

From here on out, they can only increase it 2% per year since you're back to the max cap.

Now, as another example, you could see multiple dramatic increases if you don't get back to the max cap all in one year:

Year -- Value -- Max cap with 2% increase -- Value used for property taxes -- Percent increase from previous year

2009 -- 100,000 -- 100,000 -- 100,000 -- N/A

2010 -- 105,000 -- 102,000 -- 102,000 -- +2%

2011 -- 90,000 -- 104,040 -- 90,000 -- -12%

2012 -- 90,000 -- 106,120.80 -- 90,000 -- 0%

2013 -- 100,000 -- 108,243.22 -- 100,000 -- +11%

If your value for 2014 jumps up to, say, $115,000, they still have some room left before they hit the cap, so it will increase significantly again the next year. Again, they can't go above that 2%/year cap, regardless of assessed value.

Sorry I can't make the chart headers align in CityData better, hope it makes sense.

Source: www.city-data.com

Category: Taxes

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