4.REP/Vrooman Street Act/Special Tax/Property Tax/Transfer Tax/ Assessed value/ ad valorem/California's Proposition 13/MORGAN TAXPAYERS' BILL

The maximum annual tax on real property set by Proposition 13 can be no more than

1%

sales tax?

1.Paid to the state by retailers, even if their customer didn't pay sales tax 2.Doesn't apply to food sales 3.May apply to sellers who remove a building from land prior to sale the shed removed from land prior to sale may be subject to a sales tax.

Prop 13 allows a property's base value to increase by a maximum of

2% annually, as an inflation factor.

A city may adopt its own documentary transfer tax and collect ________%

50% of the tax from the county if the county also charges the tax.

1989 - ORIGINAL TAXPAYERS' BILL OF RIGHTS ESTABLISHED

A measure enacted to protect the rights, property, and privacy of California taxpayers during the assessment and collection sales and use taxes.

ad valorem

According to value Property tax is calculated according to the value of the property as the date purchased was made final.

property ownership lifecycle

Acquiring the property; owning the property; and reverting/selling the property.

When is the Documentary Transfer Tax collected?

At closing

The maximum annual tax on real property set by Proposition 13 is capped at 1% of the property's

Base value

TAX LIENS

Can affect credit score As long as a tax lien is in force, The Board of Equalization (BOE) has a legal claim to property and, if necessary, may force a sale of the property and use proceeds from the sale to satisfy the tax debt. Before that happens, though, the BOE will offer a number of potential remedies to the taxpayer to assist in getting the debt paid. If a property tax lien is made against a property, it takes priority over all other liens, and the property can't be sold or transferred without the lien being released, minus certain exceptions.

Vrooman Street Act

Enacted in 1885 Provisions for the addition of sewers and finishing of street surfaces

California doesn't have estate tax.

Estate taxes apply at the federal level above $5.43 million

1993 - SPECIAL TAXES BILL OF RIGHTS ESTABLISHED

Expanded the original bill of rights' authority to cover special taxes.

1994 - MORGAN TAXPAYERS' BILL OF RIGHTS GOES INTO EFFECT

Further expanded the original bill of rights to include services that provide taxpayers access to explanations of their rights and the means to resolve questions and file appeals. right to view or inspect record related to accessment

THIRD EXEMPTION: NON-PROFIT PROPERTY.

IF A PROPERTY IS OWNED BY A PRIVATE SCHOOL OR OTHER NONPROFIT ENTITY, IT IS NOT TAXABLE.

FIRST EXEMPTION: GOVERNMENT-OWNED PROPERTY

IF THE GOVERNMENT OWNS IT, MOST LIKELY, THEY'RE NOT TAXING IT.

SECOND EXEMPTION: CHARITABLE PROPERTY.

IF THE PROPERTY IS OWNED BY A CHARITABLE ORGANIZATION, A HOSPITAL, OR A CHURCH, IT'S NOT TAXABLE.

Change of Ownership since February 28, 1975

If a property has been sold or the ownership has otherwise changed hands since February 28, 1975, the assessor will apply a new base value as of the year ownership changed with an annual inflation rate of no more than 2%.

Changes since February 28, 1975

If changes have been made to the property, such as the addition of new structures or significant changes to the land, and the property remains under the same ownership, the assessor will establish a new base value for the changes only. This means the property could end up with two separate base values--one based on the year of the original construction and the other based on the year of the improvements.

No change since February 28, 1975

If no changes have been made to improve the property, including new structures, the assessor applies the original (1975) base value and an inflation rate not to exceed 2% per year. This, in effect, locks in the base value until the property is either improved or sold.

special tax assessments

Often referred to as "specials", these tax assessments are levied for the purpose of raising funds for local improvements. Projects that could benefit from specials include roads or schools.

Acquisition

Points deduction Penalty-free early IRA distribution option for first-time home buyers : Closing costs are not deductible.

Veteran's Exemption Table

Property tax exemption of up to $4,000 for qualified veterans who own limited property s not apply to special assessments, special taxes, direct levies, delinquent county utility billings, weed and hazard abatement charges, or Mello-Roos Bonds. Current military personnel, those who have been honorably discharged, the unmarried surviving spouse or either parent of a deceased veteran meeting the service requirements. The claimant may not own property, real or personal, worth more in aggregate than $5,000 if the claimant is single. If married, the couple may not own property worth more than $10,000. In addition, the claimant must have lived in California on the lien date, January 1. A claim must be filed each year with the assessor of the county where the property is located

Ownership

Property taxes deduction Mortgage interest deduction Home acquisition financing Refinanced loans Home equity loans Itemized deductions and depreciation (home-based work or business)

The Improvement Bond Act of 1915

Provision for bonds issued for subdivision street improvements Bonds can carry up to 6% interest

The Mello-Roos Community Facilities Act of 1982

Provision for general improvements Does not require that improvements benefit specific individual properties or areas Not applied to property owners' tax bill. It is billed separately

Street Improvement Act of 1911

Provisions for bonds to pay for street improvements The amount levied is applied to property owners' tax bill

FOURTH EXEMPTION: HOMEOWNERS WHO LIVE IN THE HOME THEY OWN

QUALIFY FOR AN EXEMPTION OF $7,000 OF THE FULL CASH VALUE OF THEIR PROPERTY. THE DISCOUNT COMES RIGHT OFF THE TOP. PRETTY GOOD DEAL, IF YOU ASK ME.

Mello-Roos DOESN'T appears on the property tax bill, just like other specials.

Sellers of one- to four-unit dwellings must disclose Mello-Roos to potential buyers.

Use tax applies for merchandise that will be used, consumed, ____________, or given away.

Stored

Reversion

Tax breaks ($250,000/$500,000 Rule) Capital gains or losses

Benefit assessments

This assessment is not a special, but is closely related. Cities and counties can create improvement areas and levy this assessment against any property within those areas. A benefit assessment is used most often for improvements in emergency services coverage, lighting, transit, and flood control.

Use Tax

This tax is transferred to anyone who makes a purchase if the retailer doesn't have the proper permit for selling its goods 1.buying out of state from vendor who doesn't pay ca sales tax 2.buy car from a dealer who doesn't have a sales permit 3.buy mobile home from a private party.

Not redeemable

home owner presents the property tax the morning before the sale.

The Street Improvement Act of 1911

is the only special assessment that appears on the tax bill.

California's Proposition 13

it gave property owners the ability to estimate the maximum tax they'd have to pay on their property in the future, because the law limited both tax amounts and tax amount increases from year to year. Here's how it works: Proposition 13 is a tax reform measure passed by California voters in 1978 Assessed values may not increase more than 2% (based on inflation) annually. A change in ownership or other "reassessment event" gives the property a new base value of its current market value. New indebtedness is allowed under Proposition 13, but only if it is approved by a two-thirds vote of the residents who will be affected by the new indebtedness.

if mobile home is placed on other's land (mobile home park)

it is taxed only on the mobile home. Mobile home taxes are calculated based on the value of the structure.

mobile home tax

owned by the owner Until 1980 mobile homes in California were taxed like any other vehicle - with the owner paying license and registration fees. But after July 1, 1980 that changed and mobile homes were charged property taxes instead. The actual annual tax amount is limited to a maximum of 1% of the value as assessed and that assessed value can't increase more than 2% annually.

documentary tax

pay to county and city (either buyer or seller) 55 cent/ 500 dollars no documentary transfer tax for spouse or children. doesn't include any loan that is assumed in the sales transaction. ISN'T state wise tax ISN'T same manner across county

Delinquent Property Tax and Redemption in California

the homeowner has five years to settle the delinquent tax debt. If all back taxes, fees, and fines aren't paid by that time, the taxing authority has the power to sell the property at a public auction. The delinquent taxpayer may still redeem the property by paying all amounts due up to the close of business on the day before the property is sold. The sale of the property at auction must be for an amount sufficient to pay all the redemption costs. If the taxpayer redeems the property, the taxing authority issues a certificate of redemption and removes the property lien.

The assessed values,

which are used to determine property tax rates, are also used to calculate state aid for education, which is a huge source of revenue for our schools Property taxes pay for services People tend to pay their property taxes because they don't want to lose their homes. compliance is high. Also, property taxes are hard to conceal, unlike other resources of income.