Hi there - Curious how property taxes are determined for a newly built home in CA?

Asked by 90291, Hollywood Hills, Los Angeles, CA Sat Aug 6, 2011

I know the taxes are based on the amount paid when you buy a home, but to buy land and develop and build the home yourself, how are they done? I would live in the home. Is it based on cost to build or market value?

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Heather Paul’s answer
Heather Paul, Agent, Santa Monica, CA
Wed Sep 28, 2011
The standard in California is 1.25%, however many areas, especially new home communities and areas they have additional bonds and special assessments. When you buy the land, the property taxes are calculated on the purchase price, when you develop the land you will need to pull permits while the building process is taking place, once the entire project or property is completed, the county tax assessors will come out and valuate the property or do this from the plans at the building department to properly calculate you new assessed value. The new assessment will reflect the improvements you have done to the property. You might want to contact the Los Angeles Tax Assessors office for more direct questions.

Now is a great time to buy! Feel free to contact me anytime!
Have a great day,
Heather Paul, Realtor
Coldwell Banker
0 votes
Angie Simpson, Agent, Studio City, CA
Tue Aug 9, 2011
Dear Home Buyer,

In addition to the very good information given below it is important to note that different cities within a county will have varying tax rates. For example, the city of Los Angeles has taxes for expenses, or bonds voted on by residents, that places like Burbank (being its own municipality) may not have. The assessed value of the land and improvements it what is taxed.


Angie Simpson
Coldwell Banker
Web Reference:  http://www.angiesimpson.com
0 votes
Kathleen Bec…, Agent, Santa Monica, CA
Sun Aug 7, 2011
Hi Home Buyer:

Property taxes vary from count to county. In Los Angeles County, the property tax rate for a new purchase is 1.25% of the purchase price. I the event that you purchase a piece of land and then improve the land, the County Assessors Office will evaluate your improvements and tax them appropriately upon your improvements. You might want to contact the Assessors Office in the county your want to do improvements in and see what their criteria is.

Good luck!

All the best,

Kat Becker, Agent
Prudential California Realty
0 votes
John Arendsen, Agent, Leucadia, CA
Sat Aug 6, 2011
For expedience you may want to consider "Factory Built" There's some very beautiful homes being designed and built in a protected environment where all the building materials are as close to perfect as possible and free of environmental influences, theft, vandalism, etc. Your turnaaround time is much faster and you don't have to tie up the neighborhood as long and you won't have a gazillion contractors and tradesmen hanging around.

I know a lot of RE professionals may disagree but that's only because they haven't been brought up to speed about just how advanced and sophisticated Factory Built Housing as progressed. Here's some links that may better educate you on the state-of-the-art of this industry:


There are many more sources to draw great information from. Please feel free to log onto our website or email me at onthelevel@cox.net or call me anytime at 760 815-6977 Good luck and enjoy your project.

I would encourage any RE professional who may desire to tell you otherwise to log onto these links as well. You wouldn't want to embarrass yourself by bloviating about something you know little about.
0 votes
Steven Ornel…, Agent, Fremont, CA
Sat Aug 6, 2011

Looks like "Market Value" via an appraisal. See "New Construction Appraisals" http://assessor.lacounty.gov/extranet/guides/realprop.aspx which states:

"New buildings, additions, and other structures require an appraisal. Structural repairs and/or replacement are not appraisable in most situations."

You can also pick up a few more details here:

Estimating Property Taxes in CA

Best, Steve
0 votes
Elayne Ceder, Agent, Los Angeles, CA
Sat Aug 6, 2011
As otheres have stated , the Los Angeles County assessor [ if you are in LACounty] will assess/appraise your completed property-and then you will be taxed at approximately 1.25% per Proposition 13.
However, the difficulty you face in your financial planning is that since consturction time is typically 12 months or longer to completion, there is no way to determine where the market will be at the time. Also, it is difficult to know how the assessor will value your design.
One factor to remember is that in any fully developed neighborhood like Sunset Strip, Hollywood Hills, West Hollywood, etc. new constructionn is very rare. Typically when any new [ never occupied] hits the market in these kind of neighborhoods, Buyers give these homes"a price bump" - often as much as 20%- just because it is new. Similarto a new car- As soon as it is lived in- even only for a year or two, that price advantage disappears.
0 votes
Emily Knell, Agent, Huntington Beach, CA
Sat Aug 6, 2011
In Hollywood Hills you're not going to have the special Mello Roos Tax bond. Your property will be assessed by the county based on land value & size of the house upon completion. Tax rate is between 1.06-1.125%.

If you'd like to talk to a great Architect that I highly recommend, please see: http://www.ParadigmDsn.com or call Cheryl Williamsen at 714-381-3459.

562-430-3053 c
Realtor Since 1996
Main Street Realtors
0 votes
Ron Thomas, Agent, Fresno, CA
Sat Aug 6, 2011
Every County is different, with different Tax Rates,
The may also have add-ons for Bonds and Schools.
You'd have to go down to the Tax Assessor's Office.
0 votes
John Arendsen, Agent, Leucadia, CA
Sat Aug 6, 2011
Generally after you've built the home it will be assessed by the County assessor's office at the rate of about 1.2% depending on the County. However, you could be assessed over and above that if there are other "special assessments" that have been imposed in certain counties for various improvements i.e. roads, infrastructure, bridges, curbs, gutters, bridges, etc.

You'd be wise to contact the County assessor in the county you're planning to build in and present them with your plans first. They will determine the vale of the land by comparing it to other like parcels in the same area and they will charge you by the square foot for the home.
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