You've closed escrow on your new property, you've moved in, unpacked and are just getting settled into your new routine when it comes....
THE NOTICE OF SUPPLEMENTAL ASSESSMENT
Suddenly, the assessed value of your property has jumped, and your property taxes are soon to follow. We are here to ease the stress of this little piece of paper by explaining exactly what it means, and what you can do about it.
The Assessor's office in each respective California county release values for each parcel within their county. These values are released on or about July 1 of each year. These values are reflective of the value as of the preceding January 1. That's right, the value that is enrolled on July 1 is 6 months after the lein date! When a property changes ownership, the Assessor's Office is notified from the Recorder's Office. At this time, the Assessor establishes a value of the property as of the transfer date. This is the Supplemental Assessment. It creates a tax bill that is prorated for the remainder of the fiscal year. The value given in the supplemental notice is also known as the Base Year Value. In the great state of California, we have voted to allow our government to raise our property values by a maximum of 2% per year. This is known as Proposition 13. Your Base Year Value is the starting point for Prop 13 max increases.
Now to the part about what you can do about it.
Note the date of the notice. You have 60 days from the date of the notice to file an appeal. Please make sure to pay any tax bills that you get in the mean time! Appeal forms can be found on your County's website. IMPORTANT - file in the county that the parcel is located in, if you reside in a different county. The application is filed with the Board of Appeals and you will receive an application number. This can take some time, be patient.
You may be contacted for more information or to discuss your property's value and your purchase. Some may also not hear much of anything. Oftentimes, you may be able to talk over the phone and come to an agreement. You also may have to defend your case to lower your property's value. It is particularly important to challenge your Base Year Value if you feel that you overpaid for your property. Oftentimes, the supplemental value is set at or darn near your purchase price.
The downside is that the county Board of Appeals does, by law, have up to two years to hear your case. Not all of us are held on the same time scale, I guess!