Riverside County Property Taxes: Are Property Taxes Re-Assessed Using the Sale Amount, When A Property Closes Escrow? And does this apply to homes that are sold unoccupied and unfinished?
The above question was recently asked by a client regarding the property taxation of a home in Riverside County, California. The home was a "Custom Built Home", that was only partially built. In this case the sale amount of the incomplete home was $102.000.00. Comparables in the area of this home for "Finished and Occupied Homes", are above $700,000. This home buyer was thinking he could get charged very little property taxes due to the fact that he was purchasing the home for such a small amount. However, pulling permits will trigger a re-assessment...here's my full answer below:
Yes, a property is re-assessed using "Sale Amount", but unfinished homes are different. Newly built homes are assessed according to the percentage of completion. For instance, at new home sales tracts, the Riverside County Assessors office, will actually call the sales office and ask what kind of counter tops, flooring, roofing materials, were put in, as they try evaluate the home as much as possible from the very beginning before the home is sold to create a value as accurate as possible, even before the home is finished.
New homes begin being assessed as vacant land and as soon as improvements are begun and building permits are pulled the tax assessor can re-assess. Building permits trigger a re-assessment at any stage of the process.
On re-sale homes they only use the sales price, in this situation it would be the $102,000, until more permits are pulled. In a situation where a home is not complete what they will do is re-assess it once a final building permit is pulled and a "Certificate of Occupancy", is issued. Riverside County Tax Assessors office will send a field person to the home to check it out for verification purposes only. Then they will determine a "New Value".
Actually, anytime there is a permit pulled for a pool or whatever it can raise a red flag for a re-assessment. It's kind of like dealing with the IRS in that you are issued a taxable amount once a custom home is finished and you have to pay it but you can appeal it by filling out forms. :)
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