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Real estate tax experts

By BayArea follow BayArea   2021 May 26, 7:19pm 301 views   11 comments   watch   nsfw   quote   share    


Hello Patnet,

I’m hoping some of you RE experts can help chime in and provide some guidance on the following situation.

I purchased a home in the Bay Area back in Dec 2020. It was a fixer upper that needed a lot of work, both interior and exterior. The home was in a great city, great neighborhood, and great school district, so I took a chance and was fortunate to have my offer accepted.

I spent 2 full months renovating, and moved in one the third month of ownership. I spent 6-figures on the renovation.

The county assessor came by a couple weeks ago to assess the property. I wasn’t home at the time and my wife asked them to come back at another time.

They never came back and this week I received a letter from the county assessor saying that my property was assessed 11% higher than the selling price.

I’m trying to wrap my head around this. It seems criminal. They assessed 5-mo after my home purchase, after renovation, and after 5-mo time we have been in aggressive housing ramp.

I need to fight back on this. I’m just starting to research but wanted to first check with the experts on PatNet for any recommendations or guidance. Please help, thank you.
1   HunterTits   ignore (4)   2021 May 26, 7:36pm     ↓ dislike (0)   quote   flag      

BayArea says
I’m trying to wrap my head around this. It seems criminal. They assessed 5-mo after my home purchase, after renovation, and after 5-mo time we have been in aggressive housing ramp.


Yes, because it was renovated. Certain renovations automatically trigger a reassessment.

Your wife denied him access to the house. So the assessor was probably free to figure whatever he/she did via some formula with whatever data they had in such situations.

I am sure that you can challenge the assessment. But if you do, you might run the risk of them deciding on a HIGHER one out of that, I think. I would check on that also.

Taxation is theft. But it is only criminal if non-governmental agents do it. So how is this any more 'criminal'?
2   clambo   ignore (5)   2021 May 26, 7:38pm     ↓ dislike (1)   quote   flag      

Boy do I not know what you can do.
But I’m sympathetic to your problem.
Kinda sucks getting fucked over by a local government doesn’t it?
3   HunterTits   ignore (4)   2021 May 26, 7:56pm     ↓ dislike (0)   quote   flag      

This is why if I ever buy R/E in Cali (which I don't plan to), I would fly in an out-of-state contractor, pay the extra $$$ to put him up with corporate housing, whatever and just not report the renovations at all. Save a lot more in the long run.

Another thing. Buy the house via an LLC. Then when it comes time to sell it, you sell the LLC, not the house That means it is not an R/E transaction and you don't have to do anything like you do with R/E ones. That includes not needing a Realtard. The owner remains the same, so there is no property inspections by the local government, etc.

You are just selling a business. That's it. Closing can be done in a week in some cases.
4   B.A.C.A.H.   ignore (1)   2021 May 26, 8:07pm     ↓ dislike (0)   quote   flag      

BayArea says
my property was assessed 11% higher than the selling price.
HunterTits says
you might run the risk of them deciding on a HIGHER one out of that, I think.


Guaranteed by law to increase 2%, per year from the new higher basis.

It's insane.
5   HunterTits   ignore (4)   2021 May 26, 8:14pm     ↓ dislike (0)   quote   flag      

B.A.C.A.H. says
Guaranteed by law to increase 2%, per year from the new higher basis.

It's insane.


Other states it can increase by even larger amounts. No Prop 13.
6   ForcedTQ   ignore (0)   2021 May 26, 9:51pm     ↓ dislike (0)   quote   flag      

B.A.C.A.H. says
BayArea says
my property was assessed 11% higher than the selling price.
HunterTits says
you might run the risk of them deciding on a HIGHER one out of that, I think.


Guaranteed by law to increase 2%, per year from the new higher basis.

It's insane.


Actually, due to Prop 13, it’s guaranteed to increase at a MAXIMUM of 2%/YR; and only if the market justifies the increase. During 2008-2012 there were actual retractions in assessed values if you had purchased in the 2003-2006 timeframe and you have to file an assessment revision request with your county to realize the lower taxes that you should owe.
7   Blue   ignore (0)   2021 May 26, 10:07pm     ↓ dislike (0)   quote   flag      

BayArea says
I spent 2 full months renovating
Prop 13 doesn't protect from upgrades
8   FuckCCP89   ignore (6)   2021 May 26, 10:07pm     ↓ dislike (0)   quote   flag      

ForcedTQ says
During 2008-2012 there were actual retractions in assessed values if you had purchased in the 2003-2006 timeframe and you have to file an assessment revision request with your county to realize the lower taxes that you should owe.


Yep, one of my co-workers got his tax reduced.
9   BayArea   ignore (1)   2021 May 27, 4:51am     ↓ dislike (0)   quote   flag      

Thanks for all the replies.

How much time do they legally have to assess from the time of purchase?

The house is worth much more today than at my time of purchase. This is the part I don’t understand.

I didn’t buy a renovated house. I bought a fixer and renovated.
10   B.A.C.A.H.   ignore (1)   2021 May 27, 6:49am     ↓ dislike (0)   quote   flag      

ForcedTQ says
Actually, due to Prop 13, it’s guaranteed to increase at a MAXIMUM of 2%/YR; and only if the market justifies the increase. During 2008-2012 there were actual retractions in assessed values if you had purchased in the 2003-2006 timeframe and you have to file an assessment revision request with your county to realize the lower taxes that you should owe.


Yeah I remembered about that.

I seem to recall also there's a catchup provision so they can reassess to a compounded 2% per year from the original assessment when the market "corrects" back up, creating a sort of a windfall.
11   EBGuy   ignore (0)   2021 May 27, 1:08pm     ↓ dislike (0)   quote   flag      

This is from the Alameda County Assessor:
In general, what is considered assessable (taxable) new construction?
...
5. Rehabilitation, renovation, or modernization that converts an improvement to the substantial equivalent of a new improvement;


Did you pull permits? Was the amount spent more than the 11% increase?

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