Okay, so I got the letter in the mail yesterday informing me that my taxable property tax was reduced.
So I was excited, but then I looked at the other column the "Prop 13 Factored Base Year Value" and it went up.
I read it over and it says that the county is <strong>required to add 2%</strong> a year to my Factored Base Year Value. Is that right? I thought they could only do that if the value of my home went up? You can see a<a href="http://www.ocgov.com/assessor/pdf/2009BlueValueNotice.pdf"> sample of the form</a> I got here.
[quote author="halfnote19" date=1247183605]Okay, so I got the letter in the mail yesterday informing me that my taxable property tax was reduced.
So I was excited, but then I looked at the other column the "Prop 13 Factored Base Year Value" and it went up.
I read it over and it says that the county is <strong>required to add 2%</strong> a year to my Factored Base Year Value. Is that right? I thought they could only do that if the value of my home went up? You can see a<a href="http://www.ocgov.com/assessor/pdf/2009BlueValueNotice.pdf"> sample of the form</a> I got here.</blockquote>
Yes it is right. The value will go up every year at 2% of itself until the property changes hands. I'll give a quick example say you bought your house at 500k the next year the assessed base value will go up 2% of itself to $510k, 3rd year $520,200 and will continue to go up 2% of itself every year till transfer of ownership. Now say the county assessor revalues you home and it is worth say $300k in the second year. You pay taxes on that lower value of 300k for the 2nd year. But say in the 3rd year just for example prices came roaring back and now you home is worth $550k. Well the assessor is going to be right there and charge you the max based on the prop 13 base year value and is is called recapture and they will tax you at that 3rd year rate of $520,200 because that is based value at its max. So yes, it will be a day of reckoning on a lot property owners when the market starts heading up as the assessor is going to be right there with you taxing your value gains as your value starts heading up.
