|These are the stories we are working on for this week's newspaper:|
With property taxes due this week, homeowners are probably thinking about property values and the associated taxes. Property reassessment is one way to bring relief to strapped homeowners in today's troubling economic times. Many homeowners have the option of applying for a Proposition 8: "Decline in Value" review. Proposition 8 is a temporary reduction in assessed value when real property suffers a decline in market value.
Before property owners beat a path to the county assessor's office, a small caveat must be met for a Proposition 8 review to be beneficial: The current market value of the property must fall below the factored base-year value (the market value as established in 1975, or when the property was subject to new construction or change of ownership).
Before 1978, home values were assessed at current market values each year, making homeowners subject to the whims of the economy and reaping huge revenues for county coffers in times of dramatic real estate growth. During the hyperinflation of the '70s, many homeowners were taxed out of their homes. To keep skyrocketing property taxes in check and limit local government's ability to raise revenues from this tax, voters passed Proposition 13 in 1978.
Proposition 13 ties property taxes to the purchase price instead of the current market value and limits assessed value increases to a maximum of 2 percent for inflation, adjusted annually.
For the first time in the 32 years since Proposition 13 passed in 1978, the California Consumer Price Index ran in the negative in 2009. All Proposition 13 base year values will actually be lowered by .00237 percent on the 2010 - 11 tax roll, regardless of whether the property qualifies for Proposition 8 treatment.
Taxpayers will receive notices about the adjustments made under Proposition 8 assessment in mid-July to early August.
Proposition 13 also set a countywide property tax rate cap at 1 percent of assessed property value unless voters approved other special assessments.
The assessment method favors longtime homeowners. Owners of identical properties can pay vastly different taxes, based solely on when they purchased their properties.
Proposition 13 reassessments generally aren't made unless homeowners add on to property or a change in ownership occurs. Then, a reappraisal is conducted that establishes a new Proposition 13 standard for the property.
If a property has increased in market value since it was purchased or built, it will continue to be assessed at the Proposition 13 value until its current market value falls below the Proposition 13 base-year factored value. When it does, homeowners can apply for a Proposition 8 assessment.
Proposition 8 reductions in value are temporary. Once a Proposition 8 value has been enrolled, a property's value must be reviewed each following Jan. 1, to determine whether its current market value is less than its Proposition 13 factored value.
Proposition 8 requires the assessor to compare each property's factored base-year value with the current market value, and enroll the lesser of the two each year.
Proposition 8 values can change from year to year as the market fluctuates, and are not restricted by the Proposition 13 maximum adjustment of 2 percent. However, a Proposition 8 property may not be assessed at a value greater than its Proposition 13 factored base-year value.
Once the market value of a Proposition 8 property exceeds its Proposition 13 factored base-year value, the Proposition 13 value is reinstated.
For example: Say a $300,000 property had been reduced under Proposition 8 to the current market value of $250,000; then reviewed the following year when the market value increased by 5 percent, the value for that year would be $262,500.
Because the current market value is less than its current factored base-year value of $306,000 ($300,000 + 2 percent annual increase), increasing the assessed value by 5 percent is legal. The 2 percent Proposition 13 limitation applies only to the factored base-year value.
Plumas County Tax Assessor Chuck Leonardt said his office proactively reduced approximately 5,000 assessments in the 2009 - 10 tax year due to current market conditions, an increase over the 3,600 reductions made the prior year.
He adds his office is currently reviewing market data to determine what adjustments are appropriate for the 2010-11 tax year.
Preliminary market indicators demonstrate additional adjustments will be necessary in many areas throughout the county.
Property owners can initiate a review of their assessed value by contacting the assessor's office at 283-6380.
The Request for "Decline in Value" Review form for the 2010 - 11 tax year is also available on the assessor's website. The deadline for filing these requests is Dec. 31, 2010.
For more information about property taxes and Proposition 8 value reductions, refer to the assessor's website at countyofplumas.com. Click on county departments, then on Assessor. Look under forms for the document.
FRC rodeo to open arena for anyone brave enough
This cowboy holds on for dear life during last year’s saddle bronc riding portion of the rodeo clinic at Feather River College. For the third year, FRC’s rodeo...Read More...
As weather warms up, golf courses open for season
Fore! That word is once again heard in the distance in Plumas County. As springtime springs into action, golf courses across...
California Outdoors for the week of 4/11/2014
Carrie Wilson California Department of Fish and Wildlife Fish and wildlife regulations don’t always keep up with latest technology Hunting with pellet rifles Question:...Read More...