Supplemental Property Tax Assessment (Article 13A) California

Question

We have had the joy of receiving two property tax bills this year. One in the amount of about $7,000, which is the one we expected for the property. We purchased a new house from a builder in May 2015.

We also received a Supplemental bill for about $10,000, for the following reason:

This supplemental assessment is in compliance with article 13A of the California constitution. It reflects the increase in your property taxes due to change in ownership occurring 5/28/15.

I tried calling the collection office to get an explanation of this, but that was like talking to a brick wall. Google wasn't much help either. Can anyone explain what this is? Why are we being asked to pay this additional $10,000? Is this going to happen every year? Why the additional $10,000 for "change in ownership"? We bought a house in 2004 and I do not remember this particular form of robbery.

Answer 1

The tax assessor obviously thinks that the ownership was transferred, which in California triggers tax reassessment back to the current FMV.

If you have not sold/bought the house, then you need to check why the tax assessor would think that you did. Check with your county recorder to see if any deed was recorded and if not - talk to the assessor office and ask them what triggered the evaluation.

The re-assessment letter should include instructions on how to appeal, follow them.

Answer 2

The builder should have filed for an exemption due to new construction. Here's a description from the Orange County Assessor's website:

Builders' Exclusion

Under Section 75.12 of the Revenue and Taxation Code, developers' and owner-builders' newly-constructed real property will not trigger a supplemental assessment provided the property is constructed for the purpose of marketing the property, and the owner/builder notifies the Assessor, in writing, prior to or within thirty (30) days of the commencement of construction. If a property is built for resale and is subdivided into five or more parcels, the exclusion is automatic and the owner is not required to notify the Assessor.

Once the property changes ownership, is rented, leased, or otherwise used by the developer or owner-builder, a supplemental assessment is made. The date of completion of new construction is "conclusively presumed" to be the date the new construction is available for use by the developer or owner-builder.