It would have Howard Jarvis turning in his grave! But that’s just what happened to a friend of mine that I spoke with this morning. She had just returned from a hearing of the Butte County Assessment Appeals Board. Her property assessment was raised $44,000 in one year, supposedly due to the in-ground pool she had put in her yard.
As far as she is concerned there are a couple of problems with this scenario: 1. Prop 13 dictates that no increase in property tax in excess of 2% may be levied from year to year. 2. Although the pool cost $44,000 to construct, sales data demonstrates that the market value of the house is only increased by perhaps 10-20% of the cost of adding the pool (pools are a poor investment if your goal is increasing your homes value, but that’s a topic for another day) .
The board it seems had a different way of looking at it. They wanted to know the actual current value of the home, which in this case is perhaps $100,000 or more in excess of the assessment. Is their reasoning based on Article XIII-A, which (from the Butte County Website) “requires the Assessor to reappraise all property at its full market value when any of the following occurs:
A change in ownership (with some exclusions).
New construction is completed.
New construction is partially completed on the lien date.”
The explanation of the county’s obligations under Prop 13 goes on to state “As long as there is no new construction or change in title, the base value is not increased more than 2% annually, regardless of the rate of inflation.”
Who is right? The three member Assessment Appeals Board has not rendered a final judgement in this case yet – stay tuned for the outcome.
Up next: How to appeal your tax assessment
As far as she is concerned there are a couple of problems with this scenario: 1. Prop 13 dictates that no increase in property tax in excess of 2% may be levied from year to year. 2. Although the pool cost $44,000 to construct, sales data demonstrates that the market value of the house is only increased by perhaps 10-20% of the cost of adding the pool (pools are a poor investment if your goal is increasing your homes value, but that’s a topic for another day) .
The board it seems had a different way of looking at it. They wanted to know the actual current value of the home, which in this case is perhaps $100,000 or more in excess of the assessment. Is their reasoning based on Article XIII-A, which (from the Butte County Website) “requires the Assessor to reappraise all property at its full market value when any of the following occurs:
A change in ownership (with some exclusions).
New construction is completed.
New construction is partially completed on the lien date.”
The explanation of the county’s obligations under Prop 13 goes on to state “As long as there is no new construction or change in title, the base value is not increased more than 2% annually, regardless of the rate of inflation.”
Who is right? The three member Assessment Appeals Board has not rendered a final judgement in this case yet – stay tuned for the outcome.
Up next: How to appeal your tax assessment
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