Property Tax Save Money Home Value Reassessment

If you're a Homeowner, you probably have etched in your brain April 10th and December 10th, the dates when property taxes must be received by your County's Tax Collector. While we know the tax revenue pays for schools, roads and other public goods, most of us would rather pay less than more. Here are a few tips for you!

1. Pay on Time

Simple, send in your payments on time. Late penalties may be around ten percent (10%) of the current property tax installment (two per year) plus costs. The payment must be received at your County's office or be postmarked. Consider having it hand stamped at your Post Office or even send by certified mail. Perhaps you did not receive your tax bill, but this is no excuse, according to State Law. Your mortgage loan servicer sometimes accrue a property tax reserve via your monthly loan payments, and usually the servicer is responsible for making your tax payment. Please confirm that the payment has been received by the County; some Counties have electronic portals for checking payment histories. You may also consider using automatic debit systems that some Counties offer.

2. Pay by Check

Most counties will assess a usage fee if you use your Credit Card to pay. Avoid this by paying using paper or electronic check. Note that this may take extra time, so please plan accordingly.

3. Request a Reassessment

Your property's market values change constantly and will likely be quite different from the assessed value for tax purposes. Homeowners in California benefit from the (in)famous Prop 13, so your assessed value can only increase by no more than 2% per year. While historically market values have gone up in most years, there have been years when they fell. When that happens, the State requires Counties to reassess the property value down temporarily. For some Counties, this may be automatically done for your property. But if they don't, you may consider filing an appeal to adjust down your assessed value; be warned, this will not be an easy process.

Here is a video from San Francisco about their reassessment process for 2022 and 2023.

4. Be Strategic about Construction Projects

When you do major home improvements and apply for construction permits, your County will likely reassess your home value up. This is confusingly called "New Construction", although the structure is preexisting. Here's an example from San Francisco. Usually they use either your reported construction costs or use their own formulas. Obviously, the more you report, the more taxes you will have to pay in perpetuity. Also, estimated construction costs can vary quite a bit from the final actual prices. So how you go about this can save you a good deal of money. Ask your contractor or Tax Assessor's Office staff about your County's usual practices. We would be happy to share our experiences as well.

5. File for Tax Relief

From time to time, the State offers relief programs to defer or reduce your property taxes. For example, victims of wildfires may apply to the State of California. Also, the State has programs for the Pandemic.

6. Do Estate Planning

This will require a much longer discussion and laws and regulations are constantly changing. For example, Prop 19 has increased the number of times a homeowner can transfer their current property tax basis. Please contact us for recommendations for Financial Planners and Estate Attorneys.

7. Others?

Keep your eye out for other new programs. Periodically check property tax information in Your County: