well i suppose i don’t really need to know the whys… i’ve lived in a condo in san diego county for about 4 years now-- previous to this, i’ve always been in apartments.
my property tax bill when i bought this place was estimated by my lender to be less than $800 / year. i was thrilled with that number, having been told by friends to expect much worse. but apparently that estimate was based on what the previous owner paid, having lived in this condo for at least 15 years prior.
the next year, my bill doubled as a result of reassessment. the year after that, it went up another $300. this year, it’s gone up another $100. how does my property tax bill continue to increase, when the guy before me was still paying rates from 1980something? i always thought properties were reassessed only when they were sold-- these increases are killing me, especially when the housing market is actually declining! what’s the scoop? :dubious:
You don’t say where you live. The property tax laws vary tremendously depending on exactly where your house is located. California, for example, does have a law that prevents property taxes from being reassessed higher than 2% per year except when property is sold. Other states have different rules.
**amaguri **,
As bad as you dislike your property taxes, it was a lot worse prior to Proposition 13 being passed in the late 70’s. Check it out here. The previous owner must have been living in the condo for a lot longer than 15 years, so his property taxes were capped at 1% annual increases. Once he sold it to you, that triggered a reassessment and the property taxes will jump accordingly. But your property taxes should be capped at 2% per year. Also, there are certain local bond measures that could still be passed on to you in the property taxes. I’m looking at my bill right now and I see some of that. One bright spot for you … the property taxes are tax deductible.
First, you would have to provide the actual numbers, and the periods for which they were charged. Given that property taxes are broken into semi-annual payments, this might have had an effect upon how quickly they ramped up to meet the new assessment triggered by the sale of the property.
In addition, some property tax increases can occur beyond the normal 2% cap when the RATE of assessment is increased, because a new tax has been added. The assessment of your property only goes up to the cap limit, but the added mils assessed increase the total tax.
Not quite. The 2% Prop 13 limit is only for current residents. When someone buys a house, the assessed value is related to the sale price.
Whoever gave the OP the estimate was lying through his teeth, since with the boom in values, the property tax you pay has nothing to do with what the previous owner paid. The people we bought our house from had been living in it for 20 years, and their tax was < $1,000. Ours was closer to $2500. If we sold the house today, the new owners would get socked with a much bigger tax.
It’s one of the reasons retired people don’t budge from their too big houses - they’d pay more tax if they bought a smaller house these days.
Not any more. Several years ago the law was changed. If one of the owners is over 62 (assuming that we’re talking about a primary residence), they can move to a smaller place and keep their old basis.
When you move to a house, your poperty tax is a percentage (~1.1%) of the assessed value*. Your property tax the next year is that percentage of the new value or 1.02 times the previous years property tax, whichever is less.
The people next door to me who bought their house in the 60’s pay around $800/year. I bought in '93 and pay around $2800/year. The guy across the street who bought his house last year pays around $11k/year.
*There are other charges in property tax that have been passed by other propositions, things like $50/house for road improvement. There is usually a new one of these on the ballet every year.