HOUSING SLUMP HAS UPSIDE FOR BUYERS
INDUSTRY NEWS, LOCAL GOVERNMENT, SHASTA COUNTY, TIPS FOR SELLERS, TIPS FOR SENIORS
September 11th, 2008
Besides the obvious advantage the real estate market downturn has created for buyers looking for bargains, the silver lining could be a lower property tax bill for years to come. Prop 13, passed by voters in 1978, dictates the sale price be used, in most cases, to set a home’s value for tax assessment purposes. Furthermore, once set, the assessment can be raised only 2% per year thereafter. Most states can bump the value yearly even if the home has gone up 10-20% or more.
A home purchased at today’s prices, that are in some cases 40% below the 2005 peak, will benefit from this low base value even if prices rise rapidly in the future. Be careful when you buy a bank repo or distress sale property. The tax assessor may adjust the value of properties purchased at a sharp discount, due to heavy damage, upward to reflect the full-cash value. Other buyers buying homes necessitating city or county remodeling permits, could trigger a review of the assessed value raising the taxable value even higher.
Property owners that feel their home’s taxable value is too high, can request a reassessment under Prop 8. This temporary value reduction is reviewed annually and the 2% rule does not apply. The assessment could reach the Prop 13 value eventually at which point the 2% per year rule applies again. If you need expert buyer representation, contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
