O.C.’s Property Tax Hike To Be Small This Year

O.C.’s Property Tax Hike To Be Small This Year

Here’s one more reason to celebrate Independence Day: Freedom from steep property tax hikes this year for most people who own homes and commercial real estate.

Although Southern California home values jumped 22 percent in 2013, tax assessments — used to calculate property taxes — will go up just 0.45 percent, the Orange County Assessor’s Office announced Thursday.

For a typical Orange County homeowner with a median-priced home, his or her value jumped about $100,000 last year, from a median of $470,000 in December 2012 to $570,000 in December 2013. But this year’s base tax bill — tied to Jan. 1 values — will rise by about $21.

In Los Angeles County, the median home price increased by $78,000, but the base tax will rise by about $16. The assessments apply to tax bills that will be mailed in the fall and due next December and April.

The Orange County assessor released its tax roll for the 2014-15 year on Thursday. Los Angeles County will release its tax roll in mid- to late July. Tax bills also include a host of other assessments — bonds, Mello Roos and special districts (such as libraries and water agencies) — that boost overall taxes a little higher.

Some property owners will face bigger tax hikes because they recently purchased or remodeled their properties. And under a practice called “value restoration” or “recapture,” rising values enable the assessor’s office to raise taxes by significantly more than the 2 percent limit for properties that had tax cuts in prior years.But for the vast majority, tax hikes will be tiny, said Orange County Assessor Webster Guillory.

Priciest O.C. areas Assessed Value

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“It’s only the second time it’s been this low in 36 years,” Guillory said.
The reason this year’s increase is so small is due to an obscure provision of Prop. 13 and to a fluke in federal inflation numbers. Under the 1970s tax relief measure, tax hikes are tied to last year’s inflation rate, up to a maximum of 2 percent a year.Tax assessments have increased by the maximum 2 percent in 28 of the 36 years since Prop. 13 took effect, Guillory reported.

But the state determined that the Consumer Price Index rose no more than 0.45 percent last year. Federal figures show that inflation briefly dipped below 1 percent last October, the month to which tax hikes are tied.Even as inflation held steady, property values were rising. The assessor’s office reported Thursday that the assessed value of all Orange County real estate increased nearly 6.4 percent last year to $450.6 billion — an all-time high.

New construction and sales allowed combined assessments to rise by more than the 0.45 percent limit. Taxable values are reset to market values once real estate changes hands.
“New construction is up … and market values are moving up after the recession,” the assessor’s office said. “This activity helped to add value to the roll.”
Tax assessments are projected to rise for all 34 Orange County cities and for all but 57,000 of the county’s 925,000 properties.

Once boats, planes and business property is included, this year’s Orange County tax roll totals $471.2 billion, up $28.4 billion, Guillory’s office reported.
The assessor is in the process of mailing assessments to property owners, giving them an opportunity to appeal values they think are too high. The notices should arrive no later than July 18.

Tips on how to appeal a tax assessment are at: ocgov.com/gov/cob

Malakai Sparks
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