• Trusts
  • Estate Planning
  • Taxes
  • Planned Giving
  • Who Can Help
Are your legal documents safely stored?
< BACK TO HOME

Property Taxes

 

SENIOR ADVOCATE

By Liza Horvath

 

Most homeowners know that when buying a property in California the annual tax bill will come to about 0.01 percent of the purchase price. For instance, if you buy a home for $400,000, the annual property tax bill will be $4,000. Monterey County is fortunate to have a county assessor’s office that is proactive when it comes to taxation and the rising and falling property values in Monterey – fortunate because as properties were declining in market value over the past five years, Steve Vagnini, Monterey County Assessor-Clerk Recorder and his team, took steps to re-value properties for tax purposes. In all, their office notified 35,000 property owners that their taxes would be reduced. “We want the property taxes and values to be fair and, although it decreased revenue to police and fire departments, schools and other government agencies, it hopefully led to homeowners spending their extra dollars in our community and stimulating the local economy.” Vagnini further stated that, “Spending less on property tax may have meant that a property owner could more easily make mortgage payments and, as a result, keep their home.” Overall, Monterey County property taxes were reduced by some $6 billion.

 

Property tax reductions are reviewed on an annual basis and, now as property values in the county are climbing, some families that were beneficiaries of a property tax reduction may now receive notice that their taxes will be adjusted up – again to reflect the current market values of real estate. Normally property taxes can only be increased by 2 percent in any given year but this cap does not apply to houses that received a special revaluation and reduction - taxes can be increased up to the rate that the homeowner was previously paying - even if that increase would exceed the 2 percent cap.

 

One important benefit to remember when it comes to property taxes is that county residents who are 55-years-old or older have a one-time opportunity to transfer their property tax basis to a newly purchased home. Consider that, if you purchased real estate years ago for $120,000, your taxes are probably close to $1,200 per year. If you now sold that property for $500,000 and downsized to a new home for $400,000, normally your new property tax would be $4,000 per year. However, by applying to the county for consideration under a Proposition 60 claim, you may be able to transfer your lower $1,200 a year tax to your new property. The purchase must meet certain criteria, however, so for clear guidelines on this “transfer of base year value to replacement dwelling” claim check with the assessor’s office at 647-7719, 755-5035 or online at www.co.monterey.ca.us/assessor

 

While Proposition 60 states that it is a once-in-a-lifetime opportunity to transfer your low tax base, under another proposition – 110 – if you become disabled you may have a second opportunity to transfer that low tax basis. 

 

While it is important to support our county resources through property taxes, it pays to know when and how taxes can be adjusted. So, know what advantages are offered through the various propositions – they can be of significant financial benefit to you and your family.

 

Liza Horvath has over 30 years experience in the estate planning and trust fields and is the president of Monterey Trust Management, a financial and trust management company. This is not intended to be legal or tax advice. If you have a questions call (831)646-5262 or email liza@montereytrust.com

 


SIDEBAR

TRUSTEES & TRUSTEE DUTIES

PLANNED GIVING & CHARITABLE BEQUESTS

ESTATE PLANNING FOR PETS

YOUR ESTATE PLAN

CRITICAL CHOICES FOR HEALTH CARE

FAMILY OFFICE

AGENCIES: WHO DOES WHAT



USEFUL LINKS
             
Home Continuing Education Calendar Directory of Professionals Members Only Become a Member Search Contact Us
 
The information provided on this website is intended as general reference information only, and is not intended to be a substitute for professional advice based on a particular or factual situation. The information on this web site does not constitute professional legal advice, accounting or tax advice and should not be interpreted as such. Although we have made every reasonable effort to ensure that the information provided is accurate, MontereyTrust, its Members, shareholders, managers and staff, make no warranties, expressed or implied, on the information provided on this web site. The user of the information contained herein accepts it as is and assumes all responsibility for its ultimate use.

© 2014 MontereyTrust.com.  All Rights Reserved.
Follow Us on Facebook!