Property Tax Increase Disclosure - Do Sellers need to be a CPA??

Well lookie who's here?!?!?!!?!?      ;-)

Hello my friend!  Glad to see you posting here, and this is certainly controversial.  The concept is interesting, but who can predict the future?  If the tax office isn't willing to make these predictions, that should be a clue to the city leaders that this isn't a good thing to do.

Ann

LL - congrats on your first post!!  Here's to reading many more!!

Ann

Hi Lynda -

In California, we have a disclosure to buyers about the sale generating a "Supplemental Tax Bill" as well as disclosures regarding special taxes and bonds, transfer taxes,  etc.  The nice thing in CA is that we have the protection of our 1978 "Proposition 13" that states the property taxes will be based on 1.0% of the purchase price of the property, and they may not increase more than 2% per year.  Of course, the "special taxes and bonds" are added after that calculation, so that the effective tax rate is often close to 2% of the property value.  The "Supplemental" tax bill is actually the pro-rated portion of the new taxes from close of escrow date to the beginning of the new tax year. 

Lynda asked: Does your disclosure have the figure the actual dollar amount of the Supplemental Tax Bill the buyers will receive?

No - our disclosure just says there may be a supplemental bill.  (In the case of a falling market, it could actually go down.)  I know how to do the calculation and get within about $2, but usually give them an estimate that is padded by about $100, then I refer my clients to the tax assessor's website if they want the most accurate estimate.