What’s Good for California? Property Tax Revenue… or Property Tax Relief?

Property Taxes in California

Property Taxes in California

2021 forward, those in leadership roles in the state of California really should to get one thing straight. Middle class homeowners, working families, and even upper middle class property owners – which accounts for most of the state, frankly – do not need more property   tax hikes, and they do not need to be reaching deep into their pockets to be sending yet more tax revenue to the state; especially during a virulent pandemic, where middle class property owners are not getting any richer, nor (as the saying goes) are they getting any younger.
 
With so many people still furloughed, reduced to part-time work, or “temporarily” laid off… with more folks than you might think at 100% unemployed status… with a fair amount of companies shrinking their work force, with some even going completely out of business or leaving the state to set up shop in a nearby state where taxes are lower and property less expensive, plus lower overall cost of living. 

Therefore, with survival at the top of most peoples’ list, middle class families in California are not particularly interested in reading about all the billions going into the state coffers as a result of new property tax measures, in editorials and articles in local newspapers…

On the contrary, homeowners are far more interested in saving money through long-term, time tested California property tax breaks – often with information provided by seasoned property tax consultants like Michael Wyatt Consulting in Corona, and attorneys with decades of property tax relief expertise such as Rachelle Lee-Warner, Esq. at Cunningham Legal trust administration, estate-law firm in Auburn; or estate & trust lenders like Commercial Loan Corp in Newport Beach.

These firms help beneficiaries that are inheriting property from a parent save many  thousands of dollars every year by taking advantage of a (formerly Proposition 58) Prop 19 parent-child exclusion – working in conjunction with an irrevocable trust loan, making it possible to avoid property tax reassessment – buying out sibling property shares while keeping your inherited home at a low Proposition 13 tax base – buying out co-beneficiaries that are looking to sell off their inherited property shares for substantially more cash than an outside buyer would offer, which is the extra bonus. 

Firms like this will guide families through a Prop 19 parent-child exclusion and property tax transfer when inheriting property taxes, with the ability to transfer parents property taxes and keep parents property taxes through the parent-child transfer.

Every property owner and beneficiary should have reliable access to a firm that can lend money to an irrevocable trust – typically a trust loan lender.  Every  property owner in California should also have access to property tax appeals and property tax reduction, from boutique property tax relief companies. 

When we read local news or editorials, we’re encouraged to think about how wonderful all the extra property tax revenue is for California, and how helpful it is for local firemen and school boards, and how fortunate it is for realtors and well connected companies with special interest construction contracts.  Neither commercial property owners and homeowners don’t have the luxury of thinking about the state government’s terrific success at driving more tax revenue into the coffers from well disguised property tax hikes!

All property owners in California should have locked in rights to keep their yearly property taxes low, and when inheriting a home from parents and inheriting parents’ property taxes — to establish a low property tax base that will last literally forever. This is the most important safety net middle class and even upper middle class residents and beneficiaries have in the state of California… and should be focused specifically on taking advantage  that, not on the states’ fabulous increases in property tax revenue.

PART ONE: Interview With Michael Wyatt, CEO of Michael Wyatt Consulting ~ Real Property & Property Tax Advisory Firm in Corona, CA

California Property Tax Consultant

Residential Property Tax Consultant

Michael Wyatt’s very busy consulting and advisory firm in Corona, California, Michael Wyatt Consulting, works with attorneys, CPAs, financial planners, real estate brokers and their clients; who have real property and require assistance with a property tax issue. Mr. Wyatt believes that each and every client is unique, and comes to his firm with unique real property requirements. No one is a simple number on a list at Mr. Wyatt’s firm. All real estate services are designed to customize every client’s real estate needs and solutions, with decades of experience behind every analysis, insight & service.

For 25 years, Mr. Wyatt functioned successfully as a star appraiser for the Orange County Assessor’s Office – and was consistently given the most difficult commercial, retail, office, industrial, residential and apartment project appraisal assignments. As Operations Manager, Mr. Wyatt served as a senior Commercial & Residential Review Appraiser. Michael Wyatt provided valuation and legal assistance to the Assessor’s Office top management and staff on current Assessor Office guidelines and procedures, with respect to property tax laws, appraisal best practices and techniques.

Michael Wyatt Consulting annually reviews clients’ real estate values. The firm studies and forms strategy for proposed real estate transactions, along with ensuring property tax assessment avoidance. Mr. Wyatt conducts comprehensive real property research, reviews real estate deeds and other instruments for accuracy prior to recording; and serves as a liaison between clients and the Assessor’s Office – maintaining smooth, issue-free communications, coordination and cooperation with Assessors and other essential governmental agencies.


Part one of the interview with Michael Wyatt, a California Property Tax Consultant


Property Tax Transfer: Mr. Wyatt, thank you so much for speaking with us today.

Michael Wyatt: Very glad to be able to do it. 

Property Tax Transfer: Can you tell us how you view Proposition 58, and how you explain this unique property transfer tax break to new clients?  You must have to teach certain clients about what’s involved to keep parents property taxes, avoiding property tax reassessment and what they need to focus on in order to transfer parents property taxes to themselves when inheriting property, and what’s involved with California property tax transfer, and  inheriting property taxes…

Michael Wyatt: You let them know that the Proposition 58 tax benefit entitles children of parents leaving them property to preserve the low Proposition 13 maximum 2% tax base. A California property tax transfer.  However, a lot of people don’t fully understand that you have to apply for the benefit. It’s not automatic. And it doesn’t apply to the principal home.

 Property Tax Transfer: What about explaining restrictions on this tax break?

Michael Wyatt: You have to explain to them that they get the assessed value tax benefit only if it’s a non principal home. You get the assessed value waved if for example it‘s a million dollar property… You get the million excluded – but the overage is reassessed… A lot of people don’t know that. The creators of the trust get this benefit.

Property Tax Transfer: Exactly how do you define “children” of the parent leaving property?

Michael Wyatt: The definition of ‘a child’ or “children” is typically the adult children of a decedent…But this also refers to step-parents. Step-parents can also transfer property to a step-child… Mom is a step parent and can still get the benefit. In laws get the benefit as well. You don’t have to be blood relatives.

Property Tax Transfer:  Michael Wyatt Consulting frequently works with the popular trust lender Commercial Loan Corporation, providing clients with trust loans. Beside talking to them about the California property tax transfer, how do you describe California Proposition 58, and that whole process to prospects or clients, that are sort of inexperienced with all this?

Michael Wyatt: We basically introduce the trust lender, for example Commercial Loan Corporation, as a private money lender that loans to irrevocable trusts, that applies for and works in tandem with California Proposition 58… for beneficiaries who are looking to sell their real property shares – for the purpose of facilitating “non pro-rata distribution”… So every heir gets an equal share of the entire overall estate – however, not necessarily of every asset.

Property Tax Transfer: So what happens if beneficiaries go to a conventional lender, like Wells Fargo?  Where there is no trust loan loan, no loans to to irrevocable trusts; no  tax benefits associated with property tax transfer or parent to child transfer (commonly known as parent to child exclusion), so on and so forth.  

Michael Wyatt: If there is a family that goes to a conventional, pricey lender like Wells Fargo for instance – they will always require adult children, beneficiaries that want to sell an inherited property, to ‘go off-title’, and that always triggers present-day tax reassessment. And that spells an expensive 66.66% tax hike!

Property Tax Transfer: Yes. Going “off-title”, taking your name off the title, always shifts you into a very expensive scenario. And if you use the Commercial Loan Corp. trust loan?

Michael Wyatt: Well, if the family in question uses the Commercial Loan Corp, cLoanC.com, a company we have been using for years… the loan they provide is to a trust, and not to beneficiaries; so there is no title, and no crippling 66.66% property tax reassessment. 

Property Tax Transfer:  Got it.  Can you give us an example, sir?

Michael Wyatt:  Well, for example, there might be three siblings… beneficiaries – and a house to inherit.  And this is always important to remember.  If you’re one out of the three siblings that wants to keep the inherited house,  you are definitely  looking at a 66.66% property value tax reassessment – if you’re operating without a loan to a trust, or you’re using your own cash; or getting money from a  very pricey institutional lender – typically with multiple restrictions and extremely strict terms.

> Click Here for Part Two of the Interview…

Michael Wyatt may be contacted at (951) 264-6152 for questions on retaining a parent’s low property tax base through CA Proposition 13;  or with questions about  getting a loan to a trust, in conjunction with CA Proposition 58, plus requirements for Proposition 58 approval.