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Property taxes are based on a formula set by the County Assessor’s office. This formula is a bit of a mystery to some, and I will do my best to explain it to you today. There are a lot of moving parts to taxes. Hopefully, this will clarify some of the mystery surrounding property tax bills.

Notifications arrive via mail, as required by the state of California; please remember to check your mailbox for any official communication.

California Proposition 13, passed in 1979 allows for increases in assessed property tax valuations in the change of ownership and new construction instances only. The state uses January 1, 1989, as the benchmark for peak home prices in assessing property tax bases.

Other than that, a 2% cap is the most a property owner can expect from the assessor’s office. The property tax rate in San Diego County is 1%, plus bonds, fees or special charges.

The taxable value of your property is shown on the letter you receive every year from the tax clerk’s office. If you feel this amount is inaccurate, you can file an appeal with the county.

What Tips The Scales For Reevaluation

A change in ownership will alert the county to reassess your property value. The only exceptions are transfers between husband and wife or parent to child. When you sell your house, the new owner’s property taxes will be assessed at a new value. Refinancing doesn’t warrant reassessment.

Living trusts don’t warrant a new assessment value, but a change in controlling interest of a corporation will result in an adjustment in the appraisal. Fire, natural disasters, removal of a structure, or market price decline can reduce the assessed amount of your property. In other words, if a fire destroys physical property, if you move your house to another lot or the market crashes, you can request a reduction in your property taxes.

New Construction Or Remodel

Applications or issuances of building permits will alert the assessor’s office to flag the property for a revised assessment. This includes new construction. But only the land and the portion of the unfinished building are appraised, on January 1st of the current year for tax purposes.

The builder furnishes material and other building costs to the county for their evaluation and tax estimates. Remodeling your home requires a building permit, which sets the reappraisal process in motion. Once you apply for a remodeling building permit, expect a survey from San Diego County asking specifics regarding cost and size of your project.

Exceptions

Building permits issued for repair, replacement, and maintenance do not flag the system for a new appraisal. If you install a new roof, or plumbing, wiring, deck, or fence, you shouldn’t expect a new tax valuation.

Historical homes that qualify for The Mills Act will see a decrease in property taxes due to preservation initiatives.

Taxes Are A Moving Target

Please reach out with questions; I’m here to help!

House with money and tax paper mortgage deduction
** Note: Shallow depth of field