Property Taxes in California
In excess of $52 billion is collected from property taxes each year. Proposition 13 is the main legislation that guides the assessment and collection of property taxes. Passed in 1978, the law made sweeping reforms that continue to provide protection for commercial and industrial property owners today. At the same time, business owners may find that they are actually hurt by the law, which may lead them to make an assessment appeal.
Proposition 13 was passed in response to significant increases in property tax rates. The law tied property values to 1975 assessment figures. Additionally, the property tax rate was limited to one percent plus whatever was necessary to fund bonded indebtedness that had been approved by voters. Perhaps the biggest change brought about by Proposition 13 was the schedule on which properties would be assessed. Instead of being appraised cyclically at approximate five-year intervals, properties would now be assessed only when they were sold or when new construction was completed.
Longtime entrepreneurs who have owned commercial or industrial sites in California for many years are likely to be very happy with their low tax bills. On the other hand, anyone who recently acquired property, built new property or made significant improvements to existing property may feel the need to protest the appraised value. Changes to Proposition 13 are now on the horizon, and they may have a significant impact for commercial and industrial property owners if they are approved.
Potential Changes to Property Taxes
The proposed amendment to Proposition 13 would require that commercial and industrial properties be re-assessed on an annual basis. This would likely bring assessed values more in line with market value. Lawmakers are specifically targeting large corporations within the state, charging that many of these businesses have taken advantage of loopholes in the existing laws to avoid being re-assessed for more than 40 years. It remains to be seen whether this amendment will actually be approved. In the meantime, it is advisable for owners of commercial and industrial property to remain vigilant about limiting their exposure to taxes.
Estimates suggest that there are close to 1.4 million commercial properties in the state of California. This includes retail shops, warehouses, office buildings and industrial sites. It is vital that these property owners do everything in their power to protect their profitability, and that may mean fighting a property tax assessment.
Expert Property Tax Help
Let the property tax experts at Assessment Technologies help your business appeal your property’s appraised value. The process involves strict deadlines, and much of the burden of demonstrating that the property was unfairly appraised falls on the tax payer. This makes it imperative for the property owner to work with a company that specializes in strategies that are designed to limit tax liability. With their knowledge of property tax laws and procedures, Assessment Technologies can help your business save money at tax time.