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Irwtfybb, Home Buyer in Sunnyvale, CA

What can trigger Tax changes for a house?

Asked by Irwtfybb, Sunnyvale, CA Tue Aug 18, 2009

What can trigger Tax changes for a house?
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Use and zoning changes also can trigger tax changes for a property.

For example, if the zoning for property changes from residential to commercial, or if an owner is able to obtain a special use permit (or some other kind of variance), then the tax basis for that property might change. Typically the tax basis will increase for zoning changes like the one I described earlier, because a parcel of land that's zoned commercially is worth more than it would be if it were zoned residentially.
0 votes Thank Flag Link Wed Aug 19, 2009
Hi Irwtfybb,

New purchases aside, permitted improvements are the most common trigger for tax increases via the supplemental tax process.

Clarification:
While under Proposition 13 the property tax rate is fixed at 1% of assessed value, in actuality, as the market value of your home increases so will your assessed value. This will certainly result in incremental tax increases each year. This incremental cost will be in addition to amounts required to repay any assessment bonds approved by the voters.

Your property tax bill actually consists of 3 separate levy categories:

1) General Tax Levy - controlled by Proposition 13, this tax is limited to a maximum of 1% of the assessed value of your property (the "land" and "improvements"), and can be no more than 2% greater than the previous year's tax bill.

2) Voter Approved Indebtedness - includes taxes levied to repay bonds approved by the voters. This amount varies from county to county depending upon the number of local bond issues approved. Under current law, local general obligation bonds require a 2/3rds majority vote to pass.

3) Direct/Special Assessments - now controlled by Proposition 218, these assessments require a majority vote of the property owners, with each owner voting the dollar amount of their assessment. Fees charged for the property-related services of sewer, water, and refuse collection can be imposed without a vote, but may not be greater than the cost of providing the service.


While your question focuses on what drives property tax increases, you may also find the following information quite interesting as well:

Prop 8 allows individual homeowners to submit their own request for property tax reassessment. After any Prop 8 reassessment, your property assessment can change upwards at an accelerated rate faster than the CA's constitutional 2% cap normally expected, and will only occur at this accelerated rate until your property has reached the before-prop8 reassessment level.

Best, Steve
0 votes Thank Flag Link Wed Aug 19, 2009
Definitely the most common tax change on a house is the sale or transfer of ownership. This can be for a normal sale or for a transfer amongst related parties and partial transfers. Each has different implications and may or may not mean a rise in property tax payments. A very good exclusion is in the sale of a home to a child or parent. The assessed value may stay the same if the correct paperwork is filed.
0 votes Thank Flag Link Tue Aug 18, 2009
Mario Pinedo,…, Real Estate Pro in Beverly Hills, CA
MVP'08
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Dorene nailed it. :)

Because of Prop 13, once you buy a home, your property taxes remain constant UNLESS you add square footage. At that point, you home is reassessed and your taxes increase by the value of the extra feet you added. This is not a reset of your entire property tax base: your EXISTING tax base is considered and your additional square footage is calculated at your EXISTING tax rate. Unless you do some SERIOUS additions, you will not likely see much of a change.

Tax assessments against properties are not seen in a good light by local officials and therefore are not likely to happen.
Web Reference: http://www.carlmedford.com
0 votes Thank Flag Link Tue Aug 18, 2009
One of the most common is the addition of square footage to the current property. There are other ways though, which include assessments imposed upon the taxpayer by vote. (city improvements etc)
0 votes Thank Flag Link Tue Aug 18, 2009
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