Implications of Selling a piece of land for $1

18 Replies

Due to an error made by my local county my lot was valued from $55K to $1.4M. The land was bought by a trust where I am the beneficiary, spoke to the relevant officials and they agree with the anomaly however they have not done anything about it. The property taxes will become due very soon and my only choice is to dispose it to myself for $1 as it has lost value due to extortionate taxes on the erroneous new value. I am just checking to see what the implications would be other than buying myself time for another year or so. Thanks

In my humble opinion, the land is still there and conditions may have changed, but the sales price should not have any impact on the value.

When they (the assessors office) send out the notice of the assessed value every year, there is a period of time for the owner to appeal the value. Once that window has closed, their value stays until next year.
If you sell the property for $1, they may assess it for its true value based upon sales of similar properties, not $1.
Check with the assessors office about doing this. I would also check with a title company about your situation and how much would be owed in taxes based upon the current assessed value.
If taxes are not paid on a property in California for 5 years, the county can sell the property for taxes owed.
Contact a real estate attorney for legal advice before you take any action.

Take a look at this. Maybe a tax attorney can at least help give direction on the phone.

CA property tax attorney

@Annunciata R.   The way to handle the assessment is not call people at the county,  but to do a formal reassessment request.  Go to the county tax assessor website and download the forms for reassessment, fill them out and mail them in.  Don't pay any taxes until your reassessment is completed.  Don't go all DIY and go deeding the property to an entity you own or any other such nonsense.  The county will fix the mistake when they get around to the reassessment, so don't add any other sales or transfers to their research.

Is it that funky little triangle lot in LA you bought at tax sale?  

@Annunciata R.  

  CALL THE ASSESSOR NOW!  This is CA? 

1.  Are the officials from the trust or the assessors office?  If the assessors office, you need to know if an assessment was made and if it was an assessable event.  If you are retaining control of the property it may not be assessable. And even if it is it can only be assessed at market value.

It it has been reassessed then you need to know the notice date because generally you have 60 days from then to formally contest the new value.  If they agree it was a mistake they can hold the new tax bill until they make the correction. Ask for the name and number of the appraiser that will be making the correction.   Document all this in writing.  If you receive a bill, even if it is incorrect DO NOT IGNORE.

Thank you for the response I am actually still within my 60days. I immediately notified the county who said they will fix it and email me within a few days. This was a wholly inaccurate statement, not only has she never got back to me but she didn't email me back either. After waiting two weeks we called again and the guy told us to still go and file for a reassessment but the website is incredibly buggy and not permitting us to complete certain fields online.

Thank you @K. Marie Poe I had not considered trying to get a download and mailing it off to them so I will try and do this today. Oh its not that one, but one of the 9 I purchased last year.

The problem is that it is on Laurel Canyon Blvd and very few sales and comparable. The lady had originally said to me get comps within a certain radius in the last 3 months but only large expensive houses are being sold in that area. Unfortunately I won't be able to physically go into the offices as I am in my London offices till after the reassessment period ends.

Originally posted by @Annunciata R.:

Due to an error made by my local county my lot was valued from $55K to $1.4M. The land was bought by a trust where I am the beneficiary, spoke to the relevant officials and they agree with the anomaly however they have not done anything about it. The property taxes will become due very soon and my only choice is to dispose it to myself for $1 as it has lost value due to extortionate taxes on the erroneous new value. I am just checking to see what the implications would be other than buying myself time for another year or so. Thanks

What was the error? 

If the property was bought FROM you how would you be able to "dispose it to myself for 1

$1 ?

The assessors office is required by law to value property at FMV. It does NOT matter what games you are trying to play with $1. Also the assessors office has 4 years to enroll your base value. The tax collector can collect the taxes on $1,4 million during this time and collect interest and penalties if you do not pay. Email me if you do not want to be public.

sorry @Bob Bowling everyone else on this thread seems to understand what has gone wrong here and a meaningful solution has been proposed.

Updated almost 4 years ago

The error is that the value is far less than the new value. Comps are not accurate. Its is a piece of land and comps are houses sitting on larger lots. If it was $1.4M I would happily dispose at $850K

Originally posted by @Annunciata R.:

sorry @Bob Bowling everyone else on this thread seems to understand what has gone wrong here and a meaningful solution has been proposed.

No, sorry for you @Annunciata R  You have NOT been given a meaningful solution, (can you point it out?) and you are spitting in the face of expert advice!  Your privilege and not an uncommon action here.  So, are you appealing on the supp, the base or a Prop 8 or do you even have a clue.  Other people could learn from your mistakes so I hope you continue to post your results here.

Originally posted by @K. Marie Poe:

@Annunciata R.   The way to handle the assessment is not call people at the county,  but to do a formal reassessment request.  Go to the county tax assessor website and download the forms for reassessment, fill them out and mail them in.  Don't pay any taxes until your reassessment is completed. 

@K. Marie Poe   ????  FORMAL REASSESSMENT REQUEST  at the county tax assessor.

In California there is NO such thing!

Your advise to NOT try any crazy transfer bull is VERY sound.

@Bob Bowling reading through the thread you actually one of those who gave the correct advice in the first place! I thought you were a new poster.

The main issue is the county website is buggy and I can't complete my appeal online now I am going to try and get it emailed or downloaded as Im still in 60days. Marie K Poe means exactly the same thing as you have suggested even if she has used a different terminology.

Sorry if I sounded frustrated its just that my tolerance for computer systems is wearing thin. For that reason I thought it may be better to simply sell it for a £1 to save myself the ongoing frustration. It may even be my browser causing the problem.

Originally posted by @Darron Stewart:

In my humble opinion, the land is still there and conditions may have changed, but the sales price should not have any impact on the value.

@Darron Stewart  CA revenue and Taxation code Rule 2 states "

(b) When valuing real property (as described in paragraph (a)) as the result of a change in ownership (as defined in Revenue and Taxation Code, Section 60, et seq.) for consideration, it shall be rebuttably presumed that the consideration valued in money, whether paid in money or otherwise, is the full cash value of the property. The presumption shall shift the burden of proving value by a preponderance of the evidence to the party seeking to overcome the presumption. The presumption may be rebutted by evidence that the full cash value of the property is significantly more or less than the total cash equivalent of the consideration paid for the property. A significant deviation means a deviation of more than 5% of the total consideration."

Her $1 SHAM sale will be rejected!

Are there ways to block people on bigger pockets like you can on Facebook?

Originally posted by @Annunciata R.:

@Bob Bowling reading through the thread you actually one of those who gave the correct advice in the first place! I thought you were a new poster.

The main issue is the county website is buggy and I can't complete my appeal online now I am going to try and get it emailed or downloaded as Im still in 60days. Marie K Poe means exactly the same thing as you have suggested even if she has used a different terminology.

Sorry if I sounded frustrated its just that my tolerance for computer systems is wearing thin. For that reason I thought it may be better to simply sell it for a £1 to save myself the ongoing frustration. It may even be my browser causing the problem.

@Annunciata R.:   Twenty years ago I went to the CA Assessors office because I thought my assessment was wrong.  I was surrounded by women telling me to "claim a refund" go to the Assessment Appeals board, check my Supp or my Double Supp or my base year...blah ...blah.   My Appeal was REJECTED because they said I sent a copy.  I'm color blind and can't tell the difference of a copy or a black inked signed document.   THAT is when I decided to become an expert. 

I am certified by the state of CA to testify as an expert witness for ad valorem taxes.  I know the system and have contacts. tho mostly Northern CA.  I've talked to a lot of frustrated taxpayers and a lot that ONLY want to hear what they want to hear.  I gladly offer the truth and whatever.  But no guarantee on whatever.  If I have your facts I can assess your situation.  don't need your block and lot and don't need to identify yourself to me.  Last chance offer.  Otherwise, just ignore my posts.

Kristine Marie Poe relevant forms have been emailed to me. The system was not allowing online reassessment as we are still in the current year when I purchased the property. The assessors office obviously wasn't aware of that when they asked me to do the reassessment online. Online assessments can be done from 1 July 2014.

The officer has walked me through the forms. He has checked it and is happy. It needs to be postmarked by Monday at the latest along with a copy of the actual bill. They dont accept fax, copies or email versions. After monday the form I have used becomes obsolete (New Financial year) and a new one needs to be emailed to me for completion. My 60 days ends in just over 1 weeks time.

I am basically reserving my right of appeal while assessors do their job. I have the option to pay the outstanding taxes which will be refunded or wait till the adjustment. Thanks again

Originally posted by @Bob Bowling:
Originally posted by @K. Marie Poe:

@Annunciata R.   The way to handle the assessment is not call people at the county,  but to do a formal reassessment request.  Go to the county tax assessor website and download the forms for reassessment, fill them out and mail them in.  Don't pay any taxes until your reassessment is completed. 

@K. Marie Poe   ????  FORMAL REASSESSMENT REQUEST  at the county tax assessor.

In California there is NO such thing!

Your advise to NOT try any crazy transfer bull is VERY sound.

I called it a "formal reassessment request" when I should have called a "formal assessment appeal".  My apology for the confusion.

From my County Tax Assessor site:  "If a property owner has discussed his assessment with the Assessor's office and still feels that his property is over-assessed, he or she may file a formal assessment appeal." 

Just be prepared if the re-assess is not to your liking.  I have went through the process in Maryland and while the assessment was adjusted, it was more of a meet me halfway to the comps I provided.

Just a quick update on this , they have got it down from $1.4M to $100K which reduces the taxes they were demanding from $18K pa to about $260 pa. I still think its a bit higher than it should be, but for the amount of trouble Im happy to leave it at it is. It was purchased in my company name so if I sell it to myself at the purchase price then I think it would bring it down further but I dont think its worth the trouble. 

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