Many Los Angeles County homeowners are opening their property tax bills to find higher tax amounts than last year.
When you opened your Los Angeles County property tax bill this year, you may have noticed that your tax amount increased, even though we’ve been experiencing declining values in most areas.
This doesn’t seem fair, does it? Here we are experiencing a wide variety of economic challenges along with decreases in property values, yet the Los Angeles County Assessor decided that he wants more money from us anyways.
There’s actually a logical reason for this, although you may not agree with the process. Los Angeles County is prohibited from increasing your assessed value, or the amount that your property tax bill is based on, by more than 2% per year. (Thank you, Prop 13!) If your property increased in value by more than 2% from the time you bought it, or the “base year”, then the County may be playing catch-up with your property value. They won’t stop with this game of catch-up until they feel that your home’s assessed value is equal to its “real” value.
Here’s an example:
Let’s say you purchased your home in 2000 for $240,000. With the allowable 2% increase per year in your home’s assessed value, the maximum the assessor could be using for your tax base for 2008 would be $281,194. If your current property value is in excess of this $281,194, then the County will continue increasing your tax base until that value is reached.
So, if the property value in this example had increased to $420,000 during 2005 and has now declined $320,000, the County will continue to increase the assessed value by 2% per year until the assessed value at least equals the market value. On the flip side of this, if your property value is now below $281,194, the County will not automatically take this decline in value into consideration.
The graph below shows how the catch-up process works with this sample property data:
If you believe that your home’s value is less than the current assessed value, then now is the time to file an appeal. Click here for information on appealing your Los Angeles County property tax bill.
5. February 2009 at 4:11 am
Property tax reduction is still a viable option for many who have received an increase in the property tax. Dont just go with what the county assumes your current property value is at, that ‘$320k’ in the photo above might realistically be $275k which means you should get a property tax reduction!