Property Tax Impact in Today's Market-Something You Should Know!

I recently talked with another agents clients who exclaimed that they did not realize they would owe $6000 in taxes on a home they just purchased for $320,000! In todays market many buyers are purchasing homes for less than what the Ventura County Assessor shows as current market value on the tax roll. When a property is purchased and goes into escrow, the escrow company will be prorating property taxes based on the market value shown on the current tax roll. This is very important to understand because if the house that your client just purchased for $320,000 is a bank owned home and is now selling for $320,000 but previously sold for $550,000 several years ago, the assessor may very well have a tax base on the assessment roll of 1% of $550,000 (or approx. $5500 per year.). If so, then the buyer will be prorated on the $5500. HOWEVER, due to the subsequent supplemental tax roll one time billing for new purchases, this property will be reassessed at the lower market value (as of the date of purchase) and a prorated refund will be issued through the supplemental tax billing process.

It is extremely important to realize that your buyer will be out of pocket the extra amount until the new assessment is processed and the refund issued. This process can take up to a year. A phone call to the local assessor could help speed the process by bringing attention to your individual property. Also, remember all requests for reassessments are FREE!! Many people are receiving deceptive solicitations by mail requiring a fee for reassessment. Tell your clients not to be mislead by these official looking offers for tax relief.

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