Santa Barbara, CA · Member since 2013 · 4 posts · 0 votes
Hello Bigger Pockets,
I am new here and would love your help.
I am about to close escrow on a house in Santa Barbara CA for about 33% below the tax assessed value. It is trashed on the outside and inside (all cosmetic, the bones are good and it just needs some sweat equity). I write for advice on getting my tax bill reduced. Has anyone gone through this process in SB? I've checked the county tax website and it seems straightforward, but wonder if there are any tricks or other considerations. I guess I would love any and all thoughts and advice. Also do I let them see the inside (it's gross now). Or does it even matter, since I think I read that it is based on purchase price also.
Please also confirm that this is indeed something I should be considering.
Thank you so much for your help.
I love Bigger Pockets! Loving the podcast too!
geoffrey
Investor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes
13y
Welcome to BP!
The tax assessor will see your purchase price and will automatically adjust the assessed value. If this happens too late for the bill to come out at the lower value, you'll have to pay the taxes at the higher value, and eventually you'll get a refund for the overpayment.
Some states do this differently, but in CA your taxes are based on your purchase price and increase 2% per year. If you buy the house for significantly less than its market value (a good problem to have) the assessors office will sometimes set a higher assessed value than your purchase price, a value closer to fair-market value. This happens to me a lot on houses I buy at the courthouse steps, for example.
Santa Barbara, CA · Member since 2013 · 4 posts · 0 votes
13y
Thanks Brian, that make's it easy. In terms of assessing it higher closer to fair-market value, I had the property assessed and it came in below tax valuation...can I use that to appeal their assessment if they take option B and assess it close to fair-market value? Thanks so much.
Northern, VA · Member since 2013 · 141 posts · 29 votes
13y
Originally posted by Geoffrey Ravenhill:
Geoffrey Ravenhill - Thanks Brian, that make's it easy. In terms of assessing it higher closer to fair-market value, I had the property assessed and it came in below tax valuation...can I use that to appeal their assessment if they take option B and assess it close to fair-market value? Thanks so much.
Yes you should be able to appeal their valuation. Some people when buying houses think, "Hey! I'm getting such a good deal on this property! It's 100k below the tax assessment!". Really, all that means is you're probably paying way too much in taxes. The only way to change this is appeal. I wouldn't count on them automatically adjusting it based on your sale.
Investor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes
13y
Yes, Geoffrey, if they re-assess it higher than your purchase price, you can appeal it. The assessor's office's website should have the appeal process outlined.
Investor · Pawleys Island, SC · Member since 2008 · 1k+ posts · 837 votes
13y
In my area of the country, SC, our tax assessments for 2013-2016 are based on value at the end of 2012. If I want to appeal the tax assessor's valuation, I have to get an appraisal as of Dec 31, 2012 and submit the appraisal with my appeal.