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Lower CA Property Taxes
Property Tax Little Black Book, LLC is not a law firm. Valerie Faltas and/or the employees of Property Tax Little Black Book, LLC are not acting as attorneys. The information contained in Property Tax Little Black Book and the Inherited Property and Exemptions Guide or Property Tax Little Black Book is not a substitute for the advice of an attorney. Neither Valerie Faltas nor Property Tax Little Black Book can provide legal advice.
Valerie Faltas and Property Tax Little Black Book, LLC only provide a very general understanding of the law as it relates to property taxes. Although Valerie Faltas and Property Tax Little Black Book, LLC take every reasonable effort to ensure that the information on our book and our website are up-to-date and legally sufficient, the legal information on the book and on the website is not legal advice and is not guaranteed to be correct, complete or up-to-date. Because the law changes rapidly, is different from jurisdiction to jurisdiction, and is also subject to varying interpretations by different courts and certain government and administrative bodies, neither Valerie Faltas nor Property Tax Little Black Book, LLC can guarantee that all the information on the book or website is completely current.
Discover how to Lower
Your Property Taxes year after year
for as long as you own your home!
By Valerie Faltas, Property Tax Expert
Every property tax base in California trends from 0-2% every year, this percentage trend is based on the Consumer Price Index which measures inflation. Generally, most Californians pay about 1.25% of their assessed value in actual property taxes per year. So if you bought your property for $100,000, and it was market value, your base value would be $100,000. Since you would pay 1.25% of the assessed value, your tax bill the first year would be approximately $1,250. Your property tax bill for the first year would be pro-rated for the part of the year you owned the property and/or you would get credit in escrow for the amount the prior owner owed. That base value stays the same unless there is a re-assessable event, the only change is that it trends no more than two percent every year. So the second year you owned the property the trend would max out at a $2,000 increase based on the 2% limit. Your assessed value would increase from $100,000 to $102,000 which means your taxes would increase from $1,250 the first year to $1,275 the second year. The 2% compounds over time, so the amount that it increases also increases over time because the value does compound. There are years where the trend percentage is less than 2%, again that number is based on the Consumer Price Index.
Sometimes, when certain exemptions are applied to your assessed value, the assessed value will not trend. For example, if a property has a Prop 8 value (temporary decline in value due to market decrease) the value will not trend. Instead the value is reviewed each year by the Assessor’s Office to determine if it should be adjusted. Also if there is a Disaster Relief (also called Misfortune and Calamity) value applied to a property the value will not trend, instead the Assessor’s Office will visit the property each year to see where the property owner is at with repairs and will either adjust the value or leave it depending on what has been done. Additionally, most exemptions for the disabled and/or veterans don’t trend. The general rule of thumb is that your base value will trend up to 2% per year compounded every year unless there is some exemption that would apply.
Generally speaking though most homes in California will trend every year and as a result of this each homeowner will have a slight increase in property taxes every year. What happens over a period of about thirty years is that your assessed value will more than double. For example, my parents purchased their home in 1979 for $80,500 and the current assessed value for that home based on the $80,500 thirty years ago is $138,783 so in thirty years they went from paying $1,006 per year to $1,734 per year. If you start out with a property tax base of $500,000 in thirty years your assessed value will be $887,922 which means you will start off paying $6,250 per year and in thirty years be paying $11,099 per year! If you can drop that property tax base you will save thousands in the long run! If you purchased your home for $500,000 and today your home is only worth $300,000 you will save thousands! With a $300,000 tax base you will pay $3,750 per year and in thirty years your assessed value will be approximately $532,753 so you will pay about $6,659 per year in property taxes. So PERMANENTLY lowering your property tax base by $200,000 will save you EVERY year you own your home! The California Little Black Book shows you how!
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