Unexpected Property Taxes in California
Paramount Property Tax Appeal specializes in real estate and personal property tax filings. When needed, we know how to file and effectively win an appeal in any county. We represent our clients throughout the filing and appeals processes.
What Are Mello-Roos Taxes?
Because Proposition 13 (passed in 1978) restricted the ability of local governments to raise property taxes by more than an inflation factor, the budget for services and for the construction of public facilities became limited. The Community Facilities Act (commonly referred to as Mello-Roos) passed in 1982, enabled Community Facilities Districts to be formed by government agencies as a way to generate funding for public works and facilities. Generally in newer communities in California a Mello-Roos tax is collected. Those communities that require new schools and infrastructures, such as public parks and roads, impose Mello-Roos and unlike Proposition 13 restrictions, property tax can be assessed as a percentage of the home’s value.
Personal property tax which is collected on high-priced possessions, such as yachts and air planes, is most often collected from California businesses. Each year, business owners must detail the cost of all their supplies, equipment, and fixtures in a 571-L. Depending on the county in which the property is located, a business must pay for property that is not land or attached to land. This may include machinery, fixtures, office furniture and equipment; however business inventory is exempt. While computers are understandably taxable, operating systems also are included on the taxable-items list; however, most application software is exempt.
Property Tax Complications
Proration: For real property, tax is calculated for the time it is used during the year, so a property that is sold in June pays 6 months’ worth of tax. However, for personal property this rule does not apply. Personal property is a single annual rate so something sold in January costs as much as if it sold in December.
Location: Businesses located in multiple places must pay taxes to each county in which they have property. For personal property the filing of multiple 571-Ls can be time consuming and complex. Although the California Board of Equalization gives out an Assessor’s Handbook to all assessors, rules and procedures can vary by county.Even deadlines for filing taxes can differ by county.
The Morgan Property Taxpayers’ Bill of Rights allows the property owner to inspect and copy documents related to their property’s assessment. If the property owner disagrees with the assessment, they can ask for an interview to discuss the basis of the assessment and to inform the assessor of any facts affecting the value of the property. Most disagreements are settled this way, however, if an agreement cannot be reached an appeal should be considered.
In most counties an appeal is heard at an administrative hearing before the Board of Equalization. The property owner has the burden of proving that the assessor has improperly valued the property and can have representation at the hearing.