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Property taxes for new purchase

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Property taxes for new purchase

Hello,

I'm a first time poster but long time reader of myFico and now I have question.

I just bought my first home in California this October and I'm not including property tax in my mortgage payment.

 

I recently received my property tax bill. The assessed value is just over $100k over actual purchase price. This a much bigger property tax bill then expected.

The tax collector knew to bill me because they have my billing information but the assessor’s office did not consider new purchase price of October. Why?

If I send it the total due for old assessed value, will I ever get back the "overpaid" amount? Will I ever see this money or should I just wait and be late on my property taxes?

 

Message 1 of 6
5 REPLIES 5
Established Contributor

Re: Property taxes for new purchase

Welcome to the Forums. I am not an expert on property taxes, but I believe that reassessment varies by state. Some states (or counties) reassess every 5-10 years, some do so at the time of sale, some do both. My suggestion is to call your local tax collector and/or assessor's office and ask this question.
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Message 2 of 6
Regular Contributor

Re: Property taxes for new purchase

First,  I know you guys in Cali have had a rough time with your property values, however,

 

"""should I just wait and be late on my property taxes?"""

 

Absolutely NOT ...  Although I live in NC, I'm fairly certain the process to challenge (it's actually called an appeal) your property tax is the same.  I'm guessing the directions on how to appeal are included with the tax notice??

 

You have to pay the tax, appeal the amount and then hope like hell the county tax board will agree with you and if they do, you'll get a refund.

 

The county I live in reassess property values for tax porposes every three-years, in 2003 they jacked our property values in our little part of the county by over 100%,  Myself and my neighbors were  livid, We don't have acess to county water or sewer (the closest hookups are still ten miles from us today) and  lived on a state maintained dirt road at the time.

 

We, along with half the county, disputed the valuations and all we got for our trouble was for the county to agree to a half-@$$'d asphalt paving job on the dirt road. (I'm fairly certain the paving contractor was related to one of the county commissioners at the time)

 

We got no refund, and It took them two years to pave it on top of that, and they haven't repaved either.

 

""The tax collector knew to bill me because they have my billing information but the assessor’s office did not consider new purchase price of October. Why?

If I send it the total due for old assessed value, will I ever get back the "overpaid" amount?""

 

Again, here in NC they don't consider recent sales values when sending out tax bills,  just whatever the last assesed value is and if the last assement was fairly recent, I'll agree with you, it is likely over-inflated.


Appeal it and good luck.

 

Message 3 of 6
Moderator Emeritus

Re: Property taxes for new purchase


@CreditCrunched wrote:

Hello,

I'm a first time poster but long time reader of myFico and now I have question.

I just bought my first home in California this October and I'm not including property tax in my mortgage payment.

 

I recently received my property tax bill. The assessed value is just over $100k over actual purchase price. This a much bigger property tax bill then expected.

The tax collector knew to bill me because they have my billing information but the assessor’s office did not consider new purchase price of October. Why?

If I send it the total due for old assessed value, will I ever get back the "overpaid" amount? Will I ever see this money or should I just wait and be late on my property taxes?

 


Did you purchase your home for an amount that was lower than the previous sale or the previous assessed value?

 

The property tax on a house is based on the assessment that is done sometime in the spring. We get our property tax bills later in the summer, and we get a few months to collect our pennies to make the first payment, which is usually due in November or December, depending on your county.

 

In the good old days of continually rising home prices, when a house was sold it typically sold for more than the prior assessed value. The new homeowner would then receive two property tax bills - one for the tax due on the previous assessed value, and a supplemental property tax bill for the difference between the previous assessment and the sale price.

 

Nowadays, there are potentially thousands of homes that are selling for less than the assessed values (which are mostly automatically calculated based on the sale price plus 2% per year). I'm guessing that this is your situation.

 

You shouldn't have to pay tax on a home value that is more than actually you paid. If I were in your position, I'd call and write to your assessor's office for an explanation about how your property tax is going to be amended to reflect the true value of your home. Also, the previous owner is responsible for a pro-rated portion of the property tax - from the beginning of your county's fiscal year (probably July 1) until the date of the sale. This might have already been figured into your closing costs. Check on this.

 

edited to add: I live in California, too, so that's why I know that the assessments change on a yearly basis, thanks to proposition 13.

Message Edited by Lel on 12-02-2008 04:04 PM
Message 4 of 6
Valued Contributor

Re: Property taxes for new purchase

The only way to dispute the assessed value is to dispute with the county the home is in....you will also have to submit recent "comps" or other homes that have sold in the last 6 to 12 months to prove your case.

 

Paying more property taxes on a value is common and a pain to fight (I only know because this happened with my Grandma's home and it took my parents 6 months to clean up the issue and save $200 bucks).

 

Good luck!

 

Edited to add:  A lot of states have "homestead exemptions" that lowers the tax rate.....apparently no one offers it, you just have to apply and get it amended (I am not sure if CA does this) 

Message Edited by 1111mel on 12-02-2008 10:37 PM
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Message 5 of 6
Community Leader
Super Contributor

Re: Property taxes for new purchase

It's very common, almost works like clockwork, that your assessed value on an owner occupied home in California is the sales price minus a $7,000 homeowners exemption (plus any other exemptions you might be eligible for).  So if you purchased the home for $200k and the previous assessed value was $300k, your new assessed value will be $193k I'm 99.9% sure.  I'm not an assessor but I live in California and have helped people purchase a lot of homes, and have seen many of their new tax bills.  In a lot of counties here you can actually view property tax bills online (either other people's).  Now, just like Lel said, you get an initial tax bill and then sometime in the late spring/early summer you'll get a supplemental tax notice for the difference between the assessed value at the time you purchased it and the assessed value now.  This tax notice can either be a bill for property taxes that were supposed to be paid due to the increase in value (like if you were buying your home up to 2006 this was very common) or a refund of overpaid property taxes you previously paid (which is more common today).  Remember, you must always pay your property taxes even if you are disputing them, because like any other creditor, they can come after you, but instead of a collection, late payment, or charge-off... you'll get a tax lien in your public records section, hurting your scores pretty bad.
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