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What To Do When You Receive a Notice of Supplemental Assessment

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From the desk of Lauren Doyle, Esq:

If you received a Notice of Supplemental Assessment from the county assessor’s office, stop before you throw that notice away as you may be in for a steep property tax increase. What’s more, this increase may be improper and there are strict deadlines to appeal and reverse the increase.

The passage of Prop. 13 in 1978, resulted in new laws regarding how property taxes are calculated. It provides, in part, that a change in ownership of real property will result in a property tax reassessment, unless there is an exclusion.

For example, if you bought a home in California in 1999 for $600,000, your assessed value for purposes of property taxes will be $600,000. Property taxes are calculated by multiplying the tax rate for the area (which averages at about 1.1%) by the assessed value. Property taxes for a home with an assessed value of $600,000, would be around $6,600 a year. Thereafter, the county can only increase the assessed value by 2% each year, even though your home’s FMV may be a lot more.

However, if you then transfer this property to your daughter in 2019, without filing the right paperwork, you may receive a Notice of Supplemental Assessment and the assessed value will be increased to the FMV. In this example, if the FMV in 2019 is $2,000,000, the new property taxes will be around 1.1% of $2,000,000, or $22,000 a year. This is known as a property tax reassessment.

There are various exclusions available to avoid a property tax reassessment, and with proper planning, you may be able to avoid the reassessment altogether. In the above example, if you had filed a form requesting an exclusion from reassessment due to a transfer between parent and child, your home might not have undergone a reassessment.

If you have received a Notice of Supplemental Assessment, it’s important to read the notice carefully, consult with a professional, and see if you have grounds to appeal the Supplemental Assessment. These appeals are time sensitive and vary by the type of notice you receive. However, if you receive a Notice of Supplemental Assessment in Los Angeles or Orange County, you will have 60 days to file an Assessment Appeal Application, so don’t sit on your rights!

 

Disclaimer: This is not legal advice, but a newsletter containing information to help you understand what a supplemental assessment is and why you should consult with a professional about property tax issues. This newsletter does not contain statements of results in a particular case and is not a guaranty, warranty, or prediction regarding a case result or a monetary recovery.