This post is more related to California properties based on our property tax code and the famous 1978 passing of Prop 13. If you are not familiar with that proposition, it, among many other things, limited the counties ability to increase the assessed value of a property to 2% a year. The up to 2% increase on your base year value is determined by the State Board of Equalization based on inflation.
When a property is purchased, that establishes the base year value. If the market declines and the new determined value is below your base value plus inflation increases, you may request of temporary reduction of your assessment. Temporary in that it will be re-assessed each tax year until it reaches your base value again.
We purchased a home in May, 2007. (Yeah, I'm an agent and purchased at the near height of the market) We have experienced a 15-20% market decline since then. As I have only had one year of increase to my base year, I stand to receive quite a break in property taxes.
Now, the devil is in trying to get the county to apply the reduction. At the County Supervisors meeting we were lead to believe it would be an easy process. To date my attempt has not been that easy. However, I have the experience of the market and the law on my side, so eventually we should see that savings. It does profit to be in real estate right now.
Who else is seeing a savings in property taxes? If you're in California, explain how the reassessment went. Elsewhere, how do your states reassess?
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