How is a home’s value determined?
You have several ways to determine the value of a home. An appraisal is a professional estimate of a property’s market value, based on recent sales of comparable properties, location, square footage and construction quality. A comparative market analysis is an informal estimate of market value performed by a real estate agent based on similar sales and property attributes. Most agents offer free analyses in the hopes of winning your business.
How do property taxes work?
Property taxes are what most homeowners in the United States pay for the privilege of owning a piece of real estate, on average 1.3 percent of the property’s current market value. These annual local assessments by county or local authorities help pay for public services and are calculated using a variety of formulas.
What does Prop 13, 60 and 90 mean for me?
Since its passage, Proposition 13 prohibits property tax increases until property ownership is changed. (Except for annual increases to the base year value which are limited to the inflation rate, as measured by the California Consumer Price Index, or two percent, whichever is less.)
If either spouse is over age 55 when their residence is sold, PROP 60 allows for you to transfer the Prop 13 assessed valuation from the old home to the new. The rules are: it’s a replacement of a primary residence with a new home of equal or lesser value within the same county. This is also allowed once in your lifetime, and a spouse who has done it before ‘taints’ both spouses.
PROP 90 allows counties to elect to accept transfers of Prop 13 values for moves from other counties when a primary residence is replaced with a less expensive home. Thus if you are over 55 and move into a county which accepts Prop 90, you may take your old, lower Prop 13 home value with you.
Are property taxes deductible?
Property taxes on all real estate, including those levied by state and local governments and school districts, are fully deductible against current income taxes.
Are taxes on second homes deductible?
Mortgage interest and property taxes are deductible on a second home if you itemize. Check with your accountant or tax adviser for specifics.
What is an impound account?
An impound account is a trust account established by the lender to hold money to pay for real estate taxes, and mortgage and homeowners insurance premiums as they are received each month.
Where can I learn more about appealing my property taxes?
Contact your local tax assessor’s office to see what procedures to follow to appeal your property tax assessment. You may be able to appeal your assessment informally. Mostly likely, however, you will have to go through a formal tax-appeal processes, which begin with an appeal filed with the appropriate assessment appeals board.
Santa Barbara County Assessor’s office: (805) 568-2550 or go online to: http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm