California has some of the highest taxes in the country; but real estate taxes are actually quite reasonable compared to states with similar economies. That said, while we need real estate taxes to pay for crucial shared infrastructure and community projects, no one wants to pay more California real estate taxes than they need to. Fortunately, there are some ways to lower your bill.
Find Out What It’s Really Worth
In California, real estate is assessed whenever it’s sold. After that, the assessed value goes up by 2% every year until it sells again and is reassessed. Since your property tax is based on the assessed value, that value is the key issue in determining how much you pay total.
In California, there is a base rate of 1% with multiple add-ons for things like sidewalk maintenance, flood clean-up, or anything else your local community votes to add. Thus the crucial thing that determines your greatest cost will be the value of your property.
Before you can do anything else, you need to know what your home is really worth. Get a copy of your home’s current assessment from the County Assessor’s office. Talk with your realtor about property values in the area. Get an independent assessment. It all starts with knowing where you stand.
You never know what might happen until you try. If you think you’re paying too much in property tax, go to your local tax office and set up an appointment. Ask about your options for reducing property taxes.
In some cases, a reassessment might show that your property is being valued too highly. In other cases, the local tax office might be willing to work with you to temporarily lower the rate. Your best bet is always to go in person; and always be polite.
The only caveat to asking for a lower rate is if you already know your tax assessment value is lower than your property’s market value. If you do your own assessment and find the value is similar to or even a little higher than what the government estimates, it’s not in your best interests to go asking about it!
Understand Your Rate
If you’ve gotten in the habit of just dashing off a check for whatever amount shows up on the bill, now is the time to stop. Make sure you understand exactly how your tax is being assessed. Any human can make a mistake, include the people working for the county tax office. You may find out that you’re actually not paying the right rate at all!
How is your tax number calculated? What exemptions exist? Do you have a remodel you’re being taxed for that is actually exempt, like putting in disabled accessibility features? Take ownership of the process so you catch any mistakes that are costing you money.
Look for Tax Breaks
In some cases, you might be eligible for tax breaks you don’t know about. There are several you can claim in California. If you’re a veteran, you might be eligible for up to $4,000 in exemption, and even more if you’re disabled. If you’re a senior citizen selling one California property and buying another, you can transfer your base-year value to your new property. If your property is your primary residence, the first $7,000 of its value is tax-free.
These are just a few of the options worth exploring and an example of the need to be aware of your options. It will take some time to investigate all your options, but that time investment could pay off in a significantly lower tax bill.
Find Out More About California Real Estate Taxes
To learn more about California real estate taxes or about a specific property, get in touch with Teresa Mack. Teresa is LA’s local real estate expert with all the information you need to make informed real estate decisions.