CA Property Assessment
July 31, 2015 8:10 AM Subscribe
Our home was assessed for more than 100K over the purchase price. It's been 5 years. What can I do, if anything?
We purchased a home in San Francisco about 5 years ago. I just saw the assessment information (my husband usually handles this stuff, I just happened to see it and I'm mad). Apparently the original assessment was for over 400k over the purchase price and this is the adjustment he was able to get. In my mind, a property is only worth what someone paid for it, not what the state/county/whatever decides it's worth based on what they want your tax bill to be.
I'm totally open to the possibility that I'm wrong, but I'm bristling at the idea of paying an inflated tax bill.
We purchased a home in San Francisco about 5 years ago. I just saw the assessment information (my husband usually handles this stuff, I just happened to see it and I'm mad). Apparently the original assessment was for over 400k over the purchase price and this is the adjustment he was able to get. In my mind, a property is only worth what someone paid for it, not what the state/county/whatever decides it's worth based on what they want your tax bill to be.
I'm totally open to the possibility that I'm wrong, but I'm bristling at the idea of paying an inflated tax bill.
In my mind, a property is only worth what someone paid for it, not what the state/county/whatever decides it's worth based on what they want your tax bill to be.
I'm afraid that for tax purposes, what's true in your mind is irrelevant. If you were to sell your home now it would undoubtedly sell for a large amount more than you paid, and that is what the government is concerned with.
posted by We put our faith in Blast Hardcheese at 8:16 AM on July 31, 2015 [11 favorites]
I'm afraid that for tax purposes, what's true in your mind is irrelevant. If you were to sell your home now it would undoubtedly sell for a large amount more than you paid, and that is what the government is concerned with.
posted by We put our faith in Blast Hardcheese at 8:16 AM on July 31, 2015 [11 favorites]
In my mind, a property is only worth what someone paid for it, not what the state/county/whatever decides it's worth based on what they want your tax bill to be.
What if you'd bought it 30 years ago and paid a pittance? What if you'd bought it from a family member for $1? What if you'd bought it for three times as much before a huge crash?
posted by Tomorrowful at 8:24 AM on July 31, 2015 [2 favorites]
What if you'd bought it 30 years ago and paid a pittance? What if you'd bought it from a family member for $1? What if you'd bought it for three times as much before a huge crash?
posted by Tomorrowful at 8:24 AM on July 31, 2015 [2 favorites]
I've owned my condo in NYC for almost 9 years. In that time, my assessments have gone up because all of the property values in my area have gone up. The market value of your property is the basis for your property taxes, not what you paid for it.
posted by bedhead at 8:26 AM on July 31, 2015 [1 favorite]
posted by bedhead at 8:26 AM on July 31, 2015 [1 favorite]
Best answer: In my mind, a property is only worth what someone paid for it, not what the state/county/whatever decides it's worth based on what they want your tax bill to be.
That's not an accurate reflection of how the property tax system actually works. Here's the law for SF. Property tax is based, loosely, on the value of your house when it's assessed not when you bought it. This sort of thing varies considerably by location. The price you paid for it is taken into consideration but it's not really much of a mitigating data point. In your case, your house has likely increased in value. This is something you benefit from, sort of, even if it's not cash in your pocket. I know it's frustrating.
I sit on my town's Board of Civil Authority and one of the things I do is preside over tax abatement hearings. That is, where someone thinks they were overtaxed based on the value of their property. There is a very short list of exemptions people can get (here are ones for SF) and then the board can consider other ones especially if there is a hardship (like the homeowner died, not like "I do not have money for taxes"). Here is the page on the Office of the Assesor-Recorder if you want to contest your assessment.
posted by jessamyn at 8:27 AM on July 31, 2015 [4 favorites]
That's not an accurate reflection of how the property tax system actually works. Here's the law for SF. Property tax is based, loosely, on the value of your house when it's assessed not when you bought it. This sort of thing varies considerably by location. The price you paid for it is taken into consideration but it's not really much of a mitigating data point. In your case, your house has likely increased in value. This is something you benefit from, sort of, even if it's not cash in your pocket. I know it's frustrating.
I sit on my town's Board of Civil Authority and one of the things I do is preside over tax abatement hearings. That is, where someone thinks they were overtaxed based on the value of their property. There is a very short list of exemptions people can get (here are ones for SF) and then the board can consider other ones especially if there is a hardship (like the homeowner died, not like "I do not have money for taxes"). Here is the page on the Office of the Assesor-Recorder if you want to contest your assessment.
posted by jessamyn at 8:27 AM on July 31, 2015 [4 favorites]
Best answer: There is usually a municiplality-specific process for rebutting a new assessment, but there is usually a time limit in which to register your protest.
When did you receive the new assessment? What does that notice say about registering your protest?
In my city, we registered our dismay in writing, and then my husband was able to meet with the committee or assessor; they asked if we wanted an assessor to enter our home to be more detailed, and we declined. They dropped the assessment a little bit.
posted by vitabellosi at 8:27 AM on July 31, 2015
When did you receive the new assessment? What does that notice say about registering your protest?
In my city, we registered our dismay in writing, and then my husband was able to meet with the committee or assessor; they asked if we wanted an assessor to enter our home to be more detailed, and we declined. They dropped the assessment a little bit.
posted by vitabellosi at 8:27 AM on July 31, 2015
In my mind, a property is only worth what someone paid for it, not what the state/county/whatever decides it's worth based on what they want your tax bill to be.
Maybe try to reframe this in terms of a best guess of what someone would pay for it now. If you take a cursory look at the news, you'll see property values in your area have risen dramatically over the past five years. If you were to sell now, you could likely make a significant profit over what you paid five years ago. That's what the assessment is reflecting.
posted by rainbowbrite at 8:28 AM on July 31, 2015
Maybe try to reframe this in terms of a best guess of what someone would pay for it now. If you take a cursory look at the news, you'll see property values in your area have risen dramatically over the past five years. If you were to sell now, you could likely make a significant profit over what you paid five years ago. That's what the assessment is reflecting.
posted by rainbowbrite at 8:28 AM on July 31, 2015
Best answer: I'm not entirely clear as to what the facts are here.
Is this accurate? Five years ago, you purchased real property in San Francisco for $X. At that time, the property was assessed by the San Francisco County Assessors office for $X+$400k; you (through your husband) fought the assessment, and it was reduced to $x+$100k.
If that's the case, then there's not a lot you can do. Especially if time has passed, any appeal of the assessment would be gone. Since property prices are rising quickly, it could be accurate.
(And what a lot of is on this thread thus far is noise; California has Proposition 13, which prohibits the reassessment of real property over some minimal amount without a triggering event, such as a purchase.)
posted by China Grover at 8:32 AM on July 31, 2015 [8 favorites]
Is this accurate? Five years ago, you purchased real property in San Francisco for $X. At that time, the property was assessed by the San Francisco County Assessors office for $X+$400k; you (through your husband) fought the assessment, and it was reduced to $x+$100k.
If that's the case, then there's not a lot you can do. Especially if time has passed, any appeal of the assessment would be gone. Since property prices are rising quickly, it could be accurate.
(And what a lot of is on this thread thus far is noise; California has Proposition 13, which prohibits the reassessment of real property over some minimal amount without a triggering event, such as a purchase.)
posted by China Grover at 8:32 AM on July 31, 2015 [8 favorites]
If you already got a reassessment, you're stuck until the next time you're eligible for one.
Given that San Francisco's real estate market is always hot (going up to white hot / thermonuclear hot) it is NOT surprising that your house could have appreciated significantly in the past 5 years.
In fact, check your address in Zillow and such, and see how much off their "est price" is off your assessed value. You may have been getting off cheaply!
posted by kschang at 8:37 AM on July 31, 2015
Given that San Francisco's real estate market is always hot (going up to white hot / thermonuclear hot) it is NOT surprising that your house could have appreciated significantly in the past 5 years.
In fact, check your address in Zillow and such, and see how much off their "est price" is off your assessed value. You may have been getting off cheaply!
posted by kschang at 8:37 AM on July 31, 2015
Yeah, you'll only be paying 1.3% more per year in increased assessment for the time you own the property, regardless of what it's really worth, thanks to Prop 13, so this is just a temporary hassle for you.
posted by hwyengr at 8:40 AM on July 31, 2015
posted by hwyengr at 8:40 AM on July 31, 2015
As others are saying, since you haven't sold the property, you may not have triggered a new "base year" assessment for tax purposed pursuant to the requirements of Prop 13, which makes it kind of odd that you'd push to lower the value increase down from the 400K of the original assessment. That amount wouldn't affect you at all.
But in San Francisco, and quite a few other places in California, your property value is going to increase whether you like it or not; this is one of the main incentives to buy property rather than rent, because your property investment will appreciate at a very high rate. Especially so if you're someplace where there's not likely to be a drop off in demand.
Is this accurate? Five years ago, you purchased real property in San Francisco for $X. At that time, the property was assessed by the San Francisco County Assessors office for $X+$400k; you (through your husband) fought the assessment, and it was reduced to $x+$100k.
I'm reading it as they bought the property 5 years ago, and just had an assessment. The original assessment was for $400K over their purchase price, and they fought that down to $100K over the purchase price.
posted by LionIndex at 8:49 AM on July 31, 2015
But in San Francisco, and quite a few other places in California, your property value is going to increase whether you like it or not; this is one of the main incentives to buy property rather than rent, because your property investment will appreciate at a very high rate. Especially so if you're someplace where there's not likely to be a drop off in demand.
Is this accurate? Five years ago, you purchased real property in San Francisco for $X. At that time, the property was assessed by the San Francisco County Assessors office for $X+$400k; you (through your husband) fought the assessment, and it was reduced to $x+$100k.
I'm reading it as they bought the property 5 years ago, and just had an assessment. The original assessment was for $400K over their purchase price, and they fought that down to $100K over the purchase price.
posted by LionIndex at 8:49 AM on July 31, 2015
Response by poster: OK, I'm not asking if you think that I should pay more taxes or if I would make money if I sold the house. I'm asking about the tax law. I know Prop 13/Prop 8 is a hot topic and many don't agree with it - but it is the law and a consideration when you're making a significant investment in property.
To be ULTRA-CLEAR: The original assessed value of our home was over 400k more than our purchase price (I'm sure this is largely because the assessor's office didn't get 'round to doing the assessment until a year and a half after we closed). My husband was able to get an adjustment, but the original assessed value is still more than 100k over what we paid. That's what I'm asking about.
Thank you, jessamyn, China Grover, and vitabellosi for your responses. My question has been answered.
posted by tealcake at 8:49 AM on July 31, 2015
To be ULTRA-CLEAR: The original assessed value of our home was over 400k more than our purchase price (I'm sure this is largely because the assessor's office didn't get 'round to doing the assessment until a year and a half after we closed). My husband was able to get an adjustment, but the original assessed value is still more than 100k over what we paid. That's what I'm asking about.
Thank you, jessamyn, China Grover, and vitabellosi for your responses. My question has been answered.
posted by tealcake at 8:49 AM on July 31, 2015
Just a warning note, you can get your house re-assessed, but keep in mind this isn't a guarantee of reduced taxes. It's possible that the assessor will come up with a HIGHER value for your house. I have heard of that happen on rare occasion.
Also, this won't be much comfort, but you can be happy that apparently you bought your house well below its actual value.
posted by blue_beetle at 8:58 AM on July 31, 2015
Also, this won't be much comfort, but you can be happy that apparently you bought your house well below its actual value.
posted by blue_beetle at 8:58 AM on July 31, 2015
Best answer: Sale price is usually, but not always, the basis for the reassessed value when a property changes ownership in CA (a broad-stroke example would be, if you sell a property to your children for $3.50, the assessor will try to establish some fair market value to assign it for taxation purposes). Since your husband did apparently question the assessment at the time and sale price + $100k is what was settled on, this would suggest to me that the assessor thought you bought the property for less than market value, and five years later there's not likely to be any chance to appeal it further.
If you contact the assessor's office they should be able to justify and explain why they arrived at the value they did, but that's probably the most you're going to get at this point.
posted by prize bull octorok at 9:04 AM on July 31, 2015 [1 favorite]
If you contact the assessor's office they should be able to justify and explain why they arrived at the value they did, but that's probably the most you're going to get at this point.
posted by prize bull octorok at 9:04 AM on July 31, 2015 [1 favorite]
Setting aside the fact of the original assesment being so off, in California your assessment for tax purposes doesn't rise (or skyrocket) with the market increase. The amount is held down by Prop 13. It can only increase by one percent per year. Some replies here have used reasoning that applies in other states and not in Calif.
I bought ten years ago. My county graciously (without me asking) reassessed me downward when market prices dropped. Last year I got a surprise hit of ten years of one percent increases all at once, which felt abrupt.
posted by puddledork at 9:07 AM on July 31, 2015 [1 favorite]
I bought ten years ago. My county graciously (without me asking) reassessed me downward when market prices dropped. Last year I got a surprise hit of ten years of one percent increases all at once, which felt abrupt.
posted by puddledork at 9:07 AM on July 31, 2015 [1 favorite]
If you did any renovations before or right after you moved in, the cost of those renovations can be added to the assessed value ... if the price of the house made the need for renovations obvious, the assessment could have reflected expected renovations as a hedge against your doing unpermitted work that might otherwise escape the assessor's notice.
posted by MattD at 10:06 AM on July 31, 2015
posted by MattD at 10:06 AM on July 31, 2015
To be clear, since my comment might come across as a little glib, I'm saying that: the value of your property has likely gone up very significantly since purchase. You therefore have very little chance of convincing an assessor that it is now worth less than its original assessment (even if that assessment was on the high side).
Say the assessor valued it at x + $100k, where x is the 'true' value. Assuming your property is typical of the SF market, the current true value is at least 1.5x, if not more. So unless 1.5x < x + $100k then you don't have much chance of a reassessment going in your favour.
posted by caek at 11:41 AM on July 31, 2015
Say the assessor valued it at x + $100k, where x is the 'true' value. Assuming your property is typical of the SF market, the current true value is at least 1.5x, if not more. So unless 1.5x < x + $100k then you don't have much chance of a reassessment going in your favour.
posted by caek at 11:41 AM on July 31, 2015
To be ULTRA-CLEAR: The original assessed value of our home was over 400k more than our purchase price (I'm sure this is largely because the assessor's office didn't get 'round to doing the assessment until a year and a half after we closed). My husband was able to get an adjustment, but the original assessed value is still more than 100k over what we paid. That's what I'm asking about.
If it took them more than a year in a hot market to assess it, this may not be off.
When actual sales price is not being used for some reason, valuation is generally determined by looking at comps -- "comparable properties." I have had a class on real estate assessment. This is the quick and dirty version of how comps work: They look at houses identical to yours or very similar to yours (same neighborhood, same number of bedrooms and bathrooms, same size, same or similar amenities) and they use that information, plus some adjustments (more money cuz extra bath, less money cuz you don't have blah) to determine valuation. In a market like SF, I can well imagine that comparable properties were selling for at least $100k more than you paid 18 months after you purchased.
Presumably, they have a backlog and cannot keep up with assessments and too bad, so sad. It got assessed when it got assessed.
(I am not a Cali homeowner, so I don't have firsthand experience with the real estate tax stuff here. My real estate appraisal class was taken in California though.)
posted by Michele in California at 2:03 PM on July 31, 2015
If it took them more than a year in a hot market to assess it, this may not be off.
When actual sales price is not being used for some reason, valuation is generally determined by looking at comps -- "comparable properties." I have had a class on real estate assessment. This is the quick and dirty version of how comps work: They look at houses identical to yours or very similar to yours (same neighborhood, same number of bedrooms and bathrooms, same size, same or similar amenities) and they use that information, plus some adjustments (more money cuz extra bath, less money cuz you don't have blah) to determine valuation. In a market like SF, I can well imagine that comparable properties were selling for at least $100k more than you paid 18 months after you purchased.
Presumably, they have a backlog and cannot keep up with assessments and too bad, so sad. It got assessed when it got assessed.
(I am not a Cali homeowner, so I don't have firsthand experience with the real estate tax stuff here. My real estate appraisal class was taken in California though.)
posted by Michele in California at 2:03 PM on July 31, 2015
Just fyi, I don't live where you do, but I've twice pushed for tax reassessments. I filed a request and it was granted, based on the information I submitted. In both cases, I was able to submit written and photographic evidence to show that my property was worth much less than they were saying. In BOTH cases, the assessors admitted (on the phone) that they had assumed anyone moving into an older place would be gutting it. It also turned out that they had one of my homes listed as ocean view - I had to send photographs of the large buildings in front of me to show that, no, actually, I don't have a view. I used recent real estate listings and sales information, along with assessments, to show that my home did not have fancy finishings and, in fact, had may original finishings. In both cases, they came down about 20% on my assessment.
posted by Chaussette and the Pussy Cats at 6:02 PM on July 31, 2015 [2 favorites]
posted by Chaussette and the Pussy Cats at 6:02 PM on July 31, 2015 [2 favorites]
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posted by caek at 8:14 AM on July 31, 2015 [18 favorites]