What is considered property in California?
Property Tax in California
Today, California’s counties, cities, schools, and special districts rely on property taxes as their primary source of revenue. In 1978, Proposition 13 made an amendment to the state’s constitution to limit property taxes at a time when the state had surplus funds. The initiative rolled back most local real property, or real estate, assessments to 1975 market value levels, limited the property tax rate to 1 percent plus the rate necessary to fund local voter-approved bonded indebtedness, and limited future property tax increases.
How much California property tax do you pay? Proposition 13 allows properties to be reassessed to current market value only upon a change in ownership or completion of new construction (called the base year value). In addition, Proposition 13 generally limits annual increases in the base year value of real property to no more than 2 percent, except when property changes ownership or undergoes new construction. This Proposition converted the market value-based property tax system to an acquisition value-based system. As a result, longtime property owners, whose assessed values generally may not be increased more than 2 percent per year, tend to have markedly lower taxes than recent purchasers, whose assessed values tend to approximate market levels.
While individual counties assess and collect property taxes, the state Board of Equalization (BOE) regulates county assessment practices. County assessors are elected and are tasked with assessing all property in their county each year. The assessor’s primary responsibility is to annually determine the taxable value for each property so the owner is assured of paying the correct amount of property tax for the support of local government.
What Is Considered As Property?
Real property that is taxable includes the land itself, structures, fixtures and improvements attached to the land; fruit, nut bearing, or ornamental trees and vines; as well as minerals, mines, quarries and timber. High sticker value personal property is also taxable as is business personal property. Owners must detail the cost of all their supplies, equipment, and fixtures. California businesses not only pay for items that they own like machinery, fixtures, office furniture and equipment, they also may need to account for leased equipment. While computers are understandably taxable, operating systems are also included on the taxable-items list, though most application software isn’t included in the list of taxable items.
We at Paramount Property Tax Appeal help our clients to accurately estimate what their property taxes should be and to make an appeal to bring taxes down to a reasonable rate.