Proposition 13

 
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  • PROPOSITION 13

    Under State law (Proposition 13, June, 1978), real property is reappraised only when a
    change-in-ownership occurs, or upon completion of new construction. Except for these two
    instances, property assessments cannot be increased by more than 2% annually, based on the
    California Consumer Price Index. The property tax rate is 1%, plus any bonds, fees or special charges.
    For additional information, please contact the Assessor’s Office at (858) 505-6262. ​

  • Q: How was real property assessed before Proposition 13 was enacted in this state?

    A: Prior to the passage of Proposition 13, real property was appraised annually at its current market value, and there was no limitation on the tax rate that counties could apply.

  • Q: How is new construction reported to the Assessor’s Office?

    A: All the cities and the County must notify the Assessor’s Office when ever building permits are issued. The Assessor’s Office also receives information about new construction from other sources. Click here for more information for REASSESSMENTS CAUSED BY NEW CONSTRUCTION.

  • Q: Will all building permits cause a reappraisal?

    A: No. If the building permit is for repair, replacement or maintenance, the value of the property will not be increased for tax purposes. However, if a bath, kitchen, or entire house is completely remodeled, the value will be added to the current assessment. ​

  • Q: When I build a room addition, is my entire property reassessed?

    A: No. Only the value added of the new construction will increase the current assessment. For example, if you build a family room, only the value added of the new construction will be added to your current assessment. The existing home will not be reassessed for tax purposes. ​

  • Q: What is a change in ownership for property tax purposes?

    A: A change in ownership occurs whenever any interest in real property is sold or transferred. The County Recorder then reports these sales and transfers to the Assessor’s Office. For more information click here for CHANGE OF OWNERSHIP REAPPRAISALS.​

  • Q: Will most changes in ownership cause a reappraisal?

    A: Yes. The only exceptions are transfers between husband and wife, and transfers between a parent and child. All other transfers, even among family members such as siblings, are reassessed. ​

  • Q: If I refinance my house, will the property be reappraised?

    A: No. Refinancing or the creation of a trust deed will not cause a reappraisal as long as there has been no change of title. ​

  • Q: Will a reappraisal be required when property is placed in a trust?

    A: No. In this method of holding title, there is only a reassessment if there has been a change of beneficial interest or control. Revocable trusts such as living trusts are not reassessed. ​

  • Q: If a corporation changes ownership, is a reappraisal required?

    A: Yes. Under this method of ownership, a reassessment occurs when there is a change in the controlling interest of a corporation. A controlling interest is defined as an interest greater than 50%.

  • Q: Can the assessed value of my property be decreased?

    A: Yes. The assessed value of property can be decreased when ever damage occurs such as fire, or when structures are removed. State law (Proposition 8, Temporary Reduction of Assessed Value For Property Tax Purposes, passed in 1979) also allows property values to be reduced if there is a decline in market values below the current assessed value. Click here for APPLICATION FOR REVIEW OF ASSESSMENT.

 

 

 Assessment Appeals Process

 
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  • ASSESSMENT APPEALS PROCESS
    Property owners who disagree with their property’s taxable value have a right to file an appeal.
  • Q: What is an assessment appeal?
    A: An assessment appeal is a process whereby property owners can appeal their property’s assessed value to an independent citizen’s review board appointed by the Board of Supervisors. This board will review the evidence presented by the Assessor’s Office and the taxpayer, and will then establish the taxable value for the property.
  • Q: When must an assessment appeal be filed?
    A: An assessment appeal can be filed on either the supplemental or the regular assessment. When appealing a supplemental assessment, the appeal must be filed within 60 days from the mailing date on the supplemental tax bill. When appealing the regular assessment, the appeal must be filed between July 2 and November 30.
  • Q: If I file an appeal, will I have to appear at the hearing?
    A: If the property owner and the Assessor’s Office reach an agreement on the value of the property, as happens in most cases, and sign a written stipulation, no appearance is necessary. However, if an agreement is not reached with the Assessor’s Office, the property owner or an authorized agent must appear at the hearing or the case will be denied.
  • Q: What should I present at the appeal hearing to support my case?
    A: You should present information that helps to support your opinion of market values, such as sales information of comparable properties. When valuing property for purpose of either the regular roll or the supplemental roll, the Assessment Appeals Board shall not consider a sale if it has occurred more than 90 days after the date for which value is being estimated.
  • Q: Where can I obtain sales information of comparable properties?
    A: As required by state law, the Assessor’s Office keeps a listing of all recent sales, and this information is available at all Assessor branch offices as well as the main office at the County Administration Center, 1600 Pacific Highway, Room 103. Another option is to simply contact a local real estate agent within your area who will normally provide you with recent sales in your neighborhood at no cost.
  • Q: Will I have to pay my property tax bill if I file an appeal?
    A: Because of the extremely large number of assessment appeals cases being filed, chances are we will not be able to get to your case prior to the December 10th property tax installment deadline. Therefore, you should pay the December 10th installment, and hopefully, you will receive a corrected tax bill in time for the April 10th installment. If you pay both installments prior to receiving a corrected tax bill, any overpayment will be refunded.
  • Q: How can I obtain an assessment appeals application?
    A: The necessary application for filing an assessment appeal can be obtained by writing the Clerk of the Assessment Appeals Board at 1600 Pacific Highway, Room 402, San Diego, California 92101 or by calling them at (619) 531-5777. Click here for more information for APPLICATION FOR CHANGED ASSESSMENT.
     
    In addition, assessment appeals forms are available at all Assessor branch offices located throughout the county. Click here for Branch OFFICE LOCATIONS AND PHONE NUMBERS.

 

 

 Notification of Taxable Value

 
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  • NOTIFICATION OF TAXABLE VALUE

    The San Diego Assessor’s Office frequently mails out Notification of Value letters to taxpayers
    whose properties taxable values have changes. When the real estate market is in decline, taxpayers
    who purchased their property during the last few years are also being notified of their properties’ taxable
    value. For more information, please contact the assessor’s branch office nearest you or the downtown
    office at (858) 505-6262. ​

  • Q: Why are these notices mailed?

    A: The assessor’s office is required by state law to notify property owners if the taxable value of the property has changes. ​

  • Q: How many property owners will be receiving these notifications?

    A: More than 121,000 property owners have received notification reflecting a change in assessment. Additionally, as a courtesy, more than 124,000 notices were mailed to property owners who acquired their property after January 1, 1989. This was to inform them of their taxable value, which includes the annual inflationary factor not to exceed 2 percent as required by Proposition 13. ​

  • Q: Why are property owners who purchased their property after January 1, 1989 being notified?

    A: The reason this date was selected is that it is generally considered to be the peak of the real estate market. The only notification these owners would have received without this mailing would have been their annual tax bill, which is mailed in October, after the September 15th deadline for filing an appeal. ​

  • Q: If I requested a reduction in my assessment before May 31, 1997, will the assessor’s office notify me of the results?

    A: Yes. The assessor’s office has mailed Notification of Value letters to more than 55,000 property owners who requested temporary reductions in their properties’ taxable value. In addition, another 70,000 notifications were mailed to property owners who received a reduction last year. ​

  • Q: If I did not receive a notification letter, how can I find out the taxable value of my property?

    A: You can learn the taxable value of your property by calling the assessor’s branch office nearest you, or the main office at (858) 505-6262. Click here for ALL OFFICE LOCATIONS AND PHONE NUMBERS.

  • Q: If I think the taxable value of my property exceeds its market value, what should I do?

    A: If sales of comparable properties indicate that the fair market value of your property is less than the current taxable value as shown on your tax bill or recent notification, you must file an assessment appeal application. ​

  • Q: Where and how can I file an assessment appeal?

    A: The period for filing a regular assessment appeal is between July 2 and November 30. Additional information on the appeal process and the necessary application form can be obtained by calling the Clerk of the Assessment Appeals Board at (619) 531-5777. ​

 

 

 Assessment of Unfinished Construction

 
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  • ASSESSMENT OF UNFINISHED CONSTRUCTION

    Unfinished new construction is appraised by the assessor’s office each year on the first day
    of January for property tax purposes. Below are some of the most frequently asked questions
    concerning the appraisal of partially completed construction. ​

  • Q: Why is an appraisal required on January 1st for all unfinished new construction?

    A: State law requires the assessor’s office to appraise all new construction on January 1st to determine its value for property tax purposes. This taxable value is then reflected on the next regular property tax bill. ​

  • Q: How does the assessor’s office learn about new construction?

    A: The assessor’s office receives copies of all building permits issued by the cities and the county. ​

  • Q: Will the entire property be appraised if only a portion is under construction on January 1st.

    A: No. Only the value of the new, unfinished construction will be appraised. The land and the existing structure will not be reappraised for property tax purposes. ​

  • Q: How does the assessor’s office determine the value of unfinished construction?

    A: The value of unfinished construction is determined primarily by using construction costs. These costs are usually obtained from the builder, and include full construction costs, architectural expenses, financing, building permits and any other related costs. ​

  • Q: Will this January 1 appraisal of the unfinished construction cause a supplemental tax bill?

    A: No. A supplemental assessment and tax bill will not be generated until the new construction is completed. ​

  • Q: Will I be notified of the value on the unfinished construction?

    A: Yes. The assessor’s office will mail a Notification of Value letter to the property owner showing the new assessed value of the property, including the unfinished construction. ​

  • Q: What should I do if I disagree with the value of my unfinished construction?

    A: If you disagree with the value of your unfinished construction, you should first call the assessor’s branch office nearest you and discuss it with an appraiser. If you still disagree with the value, you may file an appeal between July 2 and November 30 with the Assessment Appeals Board at (619) 531-5777. ​

 

 

 Major Remodel

 
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  • MAJOR REMODEL

    Many homeowners are taking advantage of the lower interest rates to refinance their homes for
    remodeling. Below are some of the most frequently asked questions of how a remodel affects your
    property taxes. ​

  • Q: How does the Assessor’s Office know when a home has been remodeled?

    A: The Assessor’s Office receives copies of all building permits issued by the cities and the county. ​

  • Q: How does the Assessor’s Office obtain information concerning the size and the cost of a remodel?

    A: In addition to obtaining the building permit information, the Assessor’s Office mails out a questionnaire to the property owner seeking information on the specific cost of construction and the actual size of the addition.

  • Q: When will a remodel cause a property tax increase?

    A: Generally speaking, a remodel will cause a property tax increase when actual new square footage is added, or new improvements are built ( i.e., spa, swimming pool). The complete remodel of a kitchen or bath with new, upgraded fixtures and appliances will also cause an increase in the assessed value. ​

  • Q: Will every remodel cause an increase in property taxes?

    A: No. Permits for normal repair, replacement and routine maintenance do not cause a reassessment for property tax purposes. Examples of these include a new roof, replumbing, rewiring or replacing a deck, etc. ​

  • Q: Are there other times when a remodel will not cause a property tax increase?

    A: Yes. A remodel for the purposes of earthquake safety, fire protection and soundproofing will not cause an increase in property taxes. Also: a remodel for the purposes of accommodating an owner, who is permanently disabled will not cause a property tax increase. ​

  • Q: If I add a new family room, will the entire property be reassessed?

    A: No. Only the "value added" by the new family room will be assessed for property tax purposes. The rest of the house and the land will not be reassessed. ​

  • Q: How does the Assessor’s Office determine the increase in value for a major remodel?

    A: The Assessor’s Office determines the increase in value by considering the total construction cost and by reviewing recent sales of similar remodeled properties in the same area. ​

  • Q: What should I do if I disagree with the assessor’s value for my remodel?

    A: If you disagree with the value, you should immediately contact the Assessor’s Office and discuss it with an appraiser. If you still disagree, you can file an appeal with the Assessment Appeals Board within 60 days from the date on the supplemental tax bill. Click here for ASSESSMENT APPEALS PROCESS.

 

 

 Change of Ownership Reappraisals

 
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  • SUMMARY
    Under Proposition 13, a reassessment takes place upon a change of ownership or transfer of title. It is always best to review any proposed ownership change with the Assessor's Office in advance to determine any possible property tax consequences.

  • METHOD OF HOLDING TITLE
    A change in the method of holding title in itself does not cause a reappraisal. For example, if two equal partners incorporate, and each owns 1/2 of the corporate stock, no reappraisal is required. In this case, the proportional ownership has not changed, only the method of holding title. ​
  • TRUSTS
    In this method of holding title, there is only a reassessment if there has been a change of beneficial interest or control. For example, revocable trust (i.e. living trusts) are not subject to reappraisal. Irrevocable trusts are reappraisable if the recipient or beneficiary is not the current owner.

  • LEASES
    Whenever real property is leased for 35 years or more, including options, a reappraisal is required. If the tenant then transfers or subleases that property with more than 35 years remaining on the original lease, State law requires it to be reappraised again. However, if the owner transfers or sells the leased property, a reappraisal is required only if there is less than 35 years remaining on the lease. ​
  • LEGAL ENTITIES (PARTNERSHIPS AND CORPORATIONS)
    Under this method, a reassessment occurs when there is a change in the controlling interest of a corporation or partnership. A controlling interest is defined as an interest greater than 50%. These changes in ownership are monitored and reported by the State Board of Equalization.

  • TENANCY-IN-COMMON
    Under this form of co-ownership, each owner owns a specific percentage of the property. At death, tenants-in-common pass their interest in the property to their legal heir. The transfer of a tenancy-in-common interest will cause a reappraisal (unless it is a husband/wife or parent/child transfer) but only for the interest that has been transferred.

  • JOINT TENANCY

    Under this method of holding title, each owner holds the property jointly with the other owners. Upon the death of one owner, the property passes to the surviving joint tenant. For assessment purposes, the termination of a joint tenancy (other than husband and wife or parent/child transfers) causes a reappraisal. A joint tenant, however, may be added without causing a reappraisal.​

 

 

 Reassessments Caused by New Construction

 
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  • Reassessment Caused by New Construction

    Under Proposition 13, real property is reappraised only when a change-in-ownership occurs, or after new construction is completed. Generally, a change in ownership is a sale or transfer of property, while new construction is an improvement to property which requires a building permit. Except for these two instances, property assessments cannot be increased by more than 2% annually.

    Concerning new construction, the Assessor’s Office receives copies of all building permits issued by the cities as well as the County. We then divide these permits into two categories: (1) permits for repair, replacement and maintenance, and (2) permits for actual new construction.
     
    Normally, permits for repair, replacement and maintenance do not cause a reassessment for property tax purposes. Examples of these include a new roof, replumbing, rewiring, replacing an old fence or decking, etc. On the other hand, if a homeowner takes out a building permit to do an addition to his or her home, this will cause a reassessment for the new square footage added.
     
    In appraising new construction, the market value of the addition is determined and added to the value of the existing property. The value of the existing property does not change. For example, a homeowner currently has a 2,000 square foot home and builds a new 500 square foot family room. Under Proposition 13, we can only reassess the new family room, and not the existing 2,000 square foot home. The family room will be reassessed based on the "value added" which is usually the full construction cost.
     
    There are two times, however, when the "value added" may be different from the construction costs. The first is when there is an "over improvement for the area" in which the cost of construction exceeds the market value added. The other is when an owner has built the improvement himself for substantially less cost than the resulting increase in value.

     

    After the reassessment for new construction has been completed by the Assessor’s Office, the property owner is then notified in writing of our new assessment along with the right to appeal this value. For further information concerning this assessment process, please call the Assessor’s Office at (858) 505-6262.