California property tax
Property Tax in California had always been a subject of intense debate from a very long time. Every year the property tax would be raised based on the assessed value of the home and property. In the 1970's the situation was rather worse when homeowners were facing great difficulty coping with the increase in property tax. But with the passing of Proposition 13 in 1978 the situation eased. It provided a number of relief measures to the homeowners. The property tax rate was fixed at 1% cap. Accordingly, Property Tax payers were required to pay up to 1% of the assessed price.
It was also stipulated that the assessed value of homes could not exceed the 1975-76 assessed worth and any further increase had to be based on the Consumer Price Index (CPI). The enhancement could not be more than 2% per year. In case of transfer of ownership or improvements of the buildings there would be fresh assessment at the current market value. However, the new assessed value would not be more than 2% per year. This assessed value would increase annually. Evidently, Proposition 13 was chiefly to protect the property tax payers from sudden and unexpected raise in taxes.
Role of Voters and Legislators:
Proposition 13 forms the base of California?s property tax system. The system was evolved since 1978. The main players for the assessment of property tax are: California?s voters, The State Board of Equalization, The Legislature and the District assessors. While Proposition 13 was a blessing for the tax payers, the local agencies (cities, regions, and other special districts) were faced with great decrease in property taxes. They were compelled to seek other sources of fund. Even though they are authorized to levy special taxes, this step has to be ratified by two-thirds of the voters. Hence the voters have an important role in the assessment.
Bureaucrats are also intelligent enough to find means of levying taxes that ultimately circumvented the requirements of Proposition13. The local agencies started collecting excessive taxes and fees without the consent of the voters. The taxpayers were quite annoyed and Proposition 218 was started. This is also called the Right to Vote on Taxes Act. By this act people?s power increased. According to the act any increase in tax had to be ratified by two-third majority votes of the qualified voters. It was also stipulated that before an increase in the existing assessment, the district government must send information of the levy to the property owners of the region. If the majority of the owners protested against the increase in writing the new levy had to be discarded.
Taxable property in California:-
All property taxes in California are controlled by the California State Board of Equalization. While all property is taxable some are exempted by the California Constitution or the laws of the United States.
Property is classified into two categories-Real and Personal.
Real Property incorporates the possession of, claim to, ownership of and even right to the possession of land. All landed property naturally occurring on, in or above the land are taxable. This also includes minerals, standing timber and others.
Any developments and improvements of the buildings, fixtures, fences put up are all taxable.
Personal Property includes all property except real property.
Personal Property are of two kinds-Tangible and Intangible.
Tangible Personal Property comprise of all property which can be seen, evaluated, calculated and touched. This category excludes all Real Property. Office equipments, machinery, furniture and tools are some of the things included in Tangible property. Intangible Property includes such properties as stocks, bonds, credit, checks, share drafts, patents, trademarks, brand names, licenses, securities, notes, club memberships and copyrights.
Timber production zone (TPZ):
A province board of supervisors allocates a specific region of timberland in their district as timberland conserve. Such zones are known as Timberland Production Zone or TPZ. These areas are strictly used for the growing and harvesting of TIMBER only for a period of ten years. This is called ?enforceable restricted? land. There are five site quality grouping varying from Site 1 as the most productive land to Site V as the least productive area. Taxes are fixed according to productiveness of the Timberland. To find out the actual tax burden of your property, it would be judicious to seek the assistance of an experienced property tax consultant.
Property Tax Exemptions and Other Property Tax Relief Measures In California all property are taxable. However, certain kinds of property are not included in the assessment roll and hence are exempted from taxes. Exemptions are of three kinds- full exemptions, partial exemptions and special exemptions. Full or partial exemptions of buildings are determined by the portion of the property that is used.
Special organizations which are exempt from taxes are those properties which are used actively for:
Charitable purposes
Religious purposes
Literary purposes
Fraternal purposes
Disabled Vet
Cemetery
Privately owned college
Schools
Free Public Library and Museums
Exemptions are also given to the following categories:
? Disabled Wartime Veteran or surviving spouse
? Property tax exemptions for special organizations
? Property leased by an Exempt party to another exempt body
? For Lease Purchase property owned by Taxable Owner but leased to an Exempt Public body, organization or institution
? Food Processor Exemption claim
Homeowner?s Property Tax Exemption or Reduction
California state law provides homeowners a reduction in property tax provided the owners live in the home they own. To obtain this reduction all homeowners are required to file a claim for homeowner?s Property Tax Exemption with the Assessor?s Office. Property Taxes are unavoidable. If you own a Property you have to bill in the taxes. Eventually all the entire fund is used for the welfare of the state and country.
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