What is The Role of a CA Property Tax Consultant?

California Property Tax Consultant

The Role of a California Property Tax Consultant

What Property Tax Consultants Provide

This article provides an overview on property tax consulting and the benefits that come with enlisting the help of a property tax consultant with expertise in California property tax relief, among other key issues.

To begin with, County Property Tax Assessors – as every homeowner or relevant property owner, new beneficiary and estate heir in California knows – are solely responsible for implementing property tax assessments in their county. The County Assessor is also who one has to deal with when negotiating or submitting a property tax appeal, or filing various related paperwork; or to confirm deadline dates for filings.

However, we find that most homeowners and property owning landlords wind up enlisting the help of a tax appeal firm, or a professional property tax consultant to mitigate what they believe are property tax overcharges, to minimize their long-term property tax burden on a residence or an inherited home.

As many Californians know, property tax consultants frequently handle Tax Assessor negotiations or litigation issues for homeowners and business property owners; and often refer homeowners and beneficiaries to a trust lender, to take advantage of an irrevocable trust loan, while keeping a parents low property tax base.

And as many residents are aware, a loan to an irrevocable trust also works jointly with a parent-to-child exclusion from Proposition 19 (i.e., formerly Proposition 58) and as we mentioned a moment ago keeping a low property tax base while retaining an inherited home from a parent… Also being able to buyout inherited property shares from a co-beneficiary intent on selling their inherited property – for far more cash than an outside buyer would offer.  So in a sense, property tax consultants are aiding both estate heirs and trust beneficiaries looking to buyout siblings’ inherited property, as well as the siblings, or co-beneficiaries, interested in selling out. 

As most Californians that own property know, property tax relief  under Proposition 19 mainly revolves around  the property tax transfer measure, more specifically the parent-child transfer and  protected right to transfer parents property taxes when inheriting property and inheriting property taxes, generally with the ability to keep parents property taxes basically for as long as one resides in a primary residence – initiated by the parent-to-child exclusion.

CA Property Tax Consultants: Popular Categories

There are different types of property tax consulting services. Some consultants are experienced appraisers, with expertise in both residential and non-residential corporate real property evaluation. Some companies lack the expertise to some up with their own property tax valuation assessments on their own, and so hire property tax valuation consultants to produce customized property tax assessments for them.

On the other hand, there are “strategy consultants” who can negotiate property tax appeals, help with tax reduction planning, and handle payments for property owners. There are also property tax consultants that concentrate on helping property owners with compliance issues, assembling data and preparing documents to file with the County Assessor.

Michael Wyatt Consulting: General Practice CA Property Tax Consultants

Many property tax consultants offer a combination of services. This is generally the best type of property tax consultant to work with, as they are a lot less limited, in terms of what they can offer you and your family. It’s often helpful to look closely at an actual property tax consultant in California to get a real-life sense of what a professional service like this can actually offer.

For example, let’s take a look at the Michael Wyatt Consulting firm in Corona, California. Since 1978, this boutique firm has specialized in commercial and real estate appraisal, as well as property taxes and property tax relief, custom property research, real estate finance, real estate law, and real estate market analysis, site planning, and entitlements.

Setting them aside from many property tax consultants in California, this particular firm, and most generalist property tax consulting firms like them, will review your real property values every year, getting a fresh look at the status of whatever specific issues are in focus or at stake. If there are proposed property transactions in the works, a reliable property tax consultant will look at that transaction from every angle, to avoid property tax assessment.

Moreover, an on-staff general property tax consultant will always take time to respond to a client’s various needs, such as researching an issue that requires deeper investigation to ensure that all “t’s” are crossed and all “i’s” are dotted; and will always look carefully at any real estate deeds or other related items to make sure all data and numbers are completely accurate before committing final tallies and results to writing, and/or filing with the Tax Assessor.

Generalist tax consultants also tend to stand in as a “middle-man” between you, the property owner, and the Tax Assessor, coordinating your accepted fee payment – or your property tax appeal – and will complete all communications and filings with the County Tax Assessor’s office… and/or any other required government entity or agency.

Like all established, seasoned property tax consultants, the Michael Wyatt Consulting firm provides property owning clients with the knowledge they’ll need to make informed, correct real estate and/or property tax decisions – in order to meet all financial and residency challenges head on; in a timely and cost-effective manner.

Communicating With County Tax Assessors Throughout California

Additional benefits homeowners receive from working with property tax consultants include the ability to make good use of an experienced consultant’s in-depth knowledge of valuation principles, negotiating dispassionately and successfully with Tax Assessors concerning property tax breaks such as the Proposition 19 (formerly Prop 58) parent-child exclusion or assess and apply Proposition 19 tax relief measures that come with being over age 55, being severely disabled, or from owning a primary residence that was destroyed by a natural disaster like a flood or an earthquake, or a forest-fire.

Both homeowners and companies look to property tax consultants to help them put together a customized property tax relief strategy, based on the location of their home or properties’ and to present that plan effectively to the local County Tax Assessor.

A competent property tax consultant should be able to provide expertise on a transfer of a primary residence’s property tax base value to a replacement residence of any value, or to expand tax benefits for the transfer of a family farm — anywhere in California, which calls for new benefits and is highly complex, requiring rather specific expertise.

Awareness of Big-Picture Views and Legislative Issues

It is part of a property tax consultant’s job to lower the value of a property for a homeowner or a business, and to communicate this properly and effectively to a Tax Assessor, and to research challenging issues if necessary, and comprehend different industry categories whenever required.

Not only must a property tax consultant be knowledgeable about property taxes and property tax relief – the property tax consultant must also maintain a big-picture view of state or county legislation that may be looming in the future, and that may affect real estate in your particular county or region – or even possibly in the state of California, if statewide issues happen to be at stake.

Property tax consultants are occasionally also estate attorneys, and typically are compliant with Uniform Standards of Professional Appraisal Practice (USPAP) standards; and maintain a good reputation you can check on in the property tax industry associations and non-profit organizations.

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.

The Function of a CA County Assessors Office

The Role of the County Assessors Office

The Role of the County Assessors Office

The CA County Assessor’s Job

As we all know, property taxes in California are determined by the value of our property. Every county Tax Assessor has to identify and calculate the value of many different types of taxable property in all 58 counties in California, as well as deal with property tax appeal challenges, as they come into the Assessor’s office.

The Assessor has always been independently elected in California, and is supposed to be completely objective, working for the people (i.e., voters) in each Assessor’s county – to be able to avoid political or financial influence from any governing county body; to avoid coercion from any city, school or district to accelerate the number of county tax assessments in order to generate more property tax revenue.

Principle Tax Assessor Responsibilities

The Assessor is charged with making sure property owners in California are taxed at the appropriate rates; ensuring that county public services are receiving the funding they need to continue functioning. Tax Assessors have to locate real property, land, various taxable structures via maps, which reveal every known land parcel, along with an “assessment roll”, which details improvements on property as well as ownership. It’s worth noting that household furnishings, livestock for the most part, and business inventory are no longer considered “taxable property”.

Four critical duties Tax Assessors must address are:

1. Locating taxable property

2. Identifying the owners of all taxable real estate

3. Determining the assessed value of all taxable property

4. Publishing yearly assessment rolls, plus supplemental reporting

Locating Taxable Real Estate

The Assessor must locate real property, land, various taxable structures via maps, which reveal every known land parcel, along with an “assessment roll”, which details improvements on property as well as ownership. It’s worth noting that household furnishings, livestock for the most part, and business inventory are no longer considered “taxable property”.

Property Assessment:

Since 1978, California’s property tax system (under state constitution Article-13a), is typically referred to as Proposition 13; with an Amendment in 1986 adding Proposition 58 to the process which provided a parent-to-child exclusion, and allowed beneficiaries to buyout property shares inherited by co-Beneficiaries… abruptly replaced and somewhat altered in Feb of 2021 by Proposition 19; although still providing homeowners and beneficiaries with property tax relief from property tax transfer benefits avoiding property tax reassessment with the right to transfer  and keep parents property taxes when inheriting a home, and  thus inheriting parents’ property taxes with the help of a parent-child transfer, and parent-to-child exclusion from current, or “fair market value” tax property rates.

Proposition 13 evaluates real estate at the 1975 “fair market value”, including factoring in heirs inheriting parents property taxes; with yearly increases curtailed at a 2% or the inflation rate, as measured by the CA Consumer Price Index – or whichever is less.

Real property is reappraised by the Assessor for tax purposes only when there is a change in ownership; new construction on property has been completed; new construction has not been finished as of the “lien date” (Jan 1); or market value has dropped below Proposition 13 factored value on the lien date.

Reappraising Real Property in California

When any taxable property is reappraised due to change of ownership a Tax Appraiser will examine sales of similar properties. Or if the property happens to generate revenue, the Appraiser will execute “an income approach”. If the real property in question is original and unique the Appraiser could potentially use the amount of money, or budget, the property owner spent on construction – or perhaps research industry-wide studies on similar construction, and use those costs instead to base the appraisal on.

As soon as that property has been evaluated, the property owner will be contacted and notified of the new property reassessment, or evaluation, and will be given the opportunity to review and discuss with the Assessor. If the property owner happens to disagrees with the reassessment, the property owner can always apply for a property tax appeal or “revised assessment” with the local Board of Assessment Appeals.  Or enlist the help of a property tax appeal firm.

Property like boats or airplanes are assessed every year based on up-to-date Blue Book information distilled from market sales. Trade equipment is also assessed every year, using a formula based on original cost and age of the equipment.

If none of these items apply, the assessed value of a property can be increased by no more than 2% per year. Sale price of a property is considered be its’ market value unless the Assessor can prove convincingly that market value is not accurately reflected by the sale price. The Assessor is also expected to revise the sales price of a property to prove any value that can be attributable to items that are exchanged in a sale, not for cash; perhaps such as barter.

In many respects, Proposition 13 changed the rules in California – as explained by the County of Napa.org website, which tells us:

Prior to the passage of Proposition 13 in 1978, the Assessor reappraised all properties on a four-year cycle, with entire neighborhoods receiving increases in value based on recent sales in that area. Under Proposition 13, values are established at a base year, either as of March 1, 1975, or as of a change of ownership or new construction.

Proposition 13 requires an annual inflationary adjustment, not to exceed 2%. A property with a 1975 base-year value of $100,000 has a cumulative adjustment over the past 43 years of 211%, resulting in a current factored base year value of $211,000. Thus the function of the assessor has gone from doing mass appraisal impacting many properties to an individual appraisal of properties that have changed hands or had new construction.

Ownership records are maintained from documents obtained from the County Recorder. Assessor maps are updated as parcels are subdivided or their boundaries adjusted. Building permits are reviewed for accessible new construction and appraisers make discoveries in the field.

County Assessors Offices, Auditors, Auditor-Controllers, Clerks of the Board & Tax Collectors can found in all 58 counties across  the State of California: Here ~ on the BOE Website

New CA Parent-Child and Grandparent-Grandchild Property Transfer Rules Under Proposition 19

California Prop 19 Rules for Transferring Property Taxes

California Prop 19 Rules for Transferring Property Taxes

As an updated review of sorts, we would like to revisit certain Proposition 19 issues governing California property taxes. These issues have become particularly important to beneficiaries and new homeowners in particular throughout the state. The following updates address measures that are especially popular with homeowners…

In terms of basics, it’s important to reiterate that under Proposition 19 an inherited home can be transferred from a parent to their child/heir without triggering property tax reassessment, with the right to keep parents CA property taxes. However it’s essential these days to pay more attention to deadlines and filing stipulations — whereas previously this was not as necessary.

Beneficiaries frequently want to know if a parent died prior to Feb 16, 2021, but the change in ownership forms were not filed with the assessor until after Feb 16, 2021 — if the parent-to-child exclusion (from current property tax rates) is applied under former Proposition 58 measures, or if it is applied under current Proposition 19 tax measures, with the ability to keep parents CA property taxes…. The confirmed answer is that an inherited property transfer is calculated by date-of-death to determine the official date of change of ownership.

A good number of trust beneficiaries inheriting real property from a parent, considering their option to buyout siblings’ inherited property shares, often ask trust lenders if a parent is leaving a family home to three siblings/heirs, will that family home be the primary family home of all three heirs — or just the one heir.  And it turns out that only one sibling/heir is expected, under California tax law, to take over that family home as a primary residence. Yet all three siblings still have to be valid heirs.

Beneficiaries and heirs of an active estate, inheriting assets, often ask their attorney about the correct time-frame to establish an inherited family property as their “primary family home”…  Estate attorneys typically confirm that beneficiaries inheriting a house from a parent who wish to keep parents CA property taxes on a property tax transfer, when inheriting property taxes, are expected to establish that house as their “principle family residence” within 12-months of the purchase or transfer of that inherited property, if they want to avoid property tax reassessment using their existing ability to transfer parents property taxes, when inheriting property taxes from a parent. 

Yet heirs are still being able to take advantage of their right to a parent to child property tax transfer on an inherited home  and a  parent-to-child exclusion; even with all these confusing and sometimes baffling new rules for property tax transfers in California  additional intra-family options are available to heirs such as buying out co-beneficiaries’ property shares on a sibling-to-sibling property share while keeping a low property tax base when inheriting a home.

If beneficiaries or heirs are inheriting a family farm, they often look to their estate lawyer, or trust lender, for answers… if they are looking to buyout co-beneficiaries to retain the inherited property for themselves – at their parent’s low property tax base – to find out if the Proposition 19 parent-to-child exclusion (from current tax rates) also applies to family farms.

In other words, does a family farm also have to be a principal or primary residence of the inheriting beneficiaries or heirs… And the answer is no, the family farm does not have to be the principal residence of the inheriting parties in order to qualify for the parent-to-child exclusion. A family farm is viewed as any real property which is under cultivation or which is being used for pasture or grazing, or that is used to produce an agricultural product.

Many Californians want to know if Proposition 19 is retroactive; if property transfers that have already benefited from Proposition 58 parent-to-child exclusion benefits are going to be reassessed… And they are informed that Proposition 58 applies to transfers that were implemented on or prior to Feb 15, 2021. The current Proposition 19 ability to keep parents CA property taxes applies only to transfers that take place happen after Feb 16, 2021.

An inherited house, when transferred from a parent to their child/heir – is expected to be the “primary family home” of an heir. Beneficiaries or heirs frequently ask their property tax consultant or attorney how long they need to reside in or maintain their inherited property as “a primary family home” to be able to retain the parent-child exclusion. The answer is unequivocally that the Prop 19 exclusion applies only as long as the heir, or beneficiaries, reside in inherited  property as their “principle family home”.

In the event that a family home is no longer used as the primary residence of a beneficiary inheriting a home, that property should receive the factored base year that applies, had the family home not qualified for exclusion at the time of purchase or transfer. The new taxable value will be the fair market value of the home on the date of inheritance, adjusted yearly for inflation. 

Hence, an updated look at certain new parent-child and grandparent-grandchild property transfer rules and regulations under Proposition 19.