Are you paying more taxes than you should?

Jane Gray
Jane Gray
Published on October 5, 2017

Get this.  Roughly 50% of people are paying more property tax every year than they need to.  You see the California Constitution provides for what’s called a Homeowner’s Exemption of $7,000 (maximum) in assessed value from the property tax assessment of any property owned and occupied as the owner’s principal place of residence. 

What that means in a nutshell is that you get an off-the-top exemption on the County’s assessed value of your house IF you file the right form to claim that exemption and that exemption reduces the annual property tax due by up to $70/year. 

Okay, I get it – $70/year isn’t much, but why pay it if you don’t have to? 

Funny story, I call the Placer County Tax Assessor’s office last week and I’m asking a very nice person about their process for telling people about the Exemption and she says, “Well, we send the form out every time there’s a status change:  change of ownership, refinance, new assessment for a pool or an addition on the house, things like that.” she says helpfully.

“Oh, I see.  Then I guess people probably get the form back in to you guys to claim the exemption, yea?”  I say thinking there’s really not much point pursuing this line of questioning.

She laughs.  “No, they don’t.  In fact, I didn’t do mine for the 12 years I lived in my house until I started working for the County!

“Really?  Why’s that?”  I ask.

“Well, I just tossed the envelope thinking it was junk mail.” She says and truth be told, she’s not the only one.  The lack of knowledge spans all price points.

That $840 she gave away to Placer County she can’t get back!  I’m sure though that the County thanks her for her generous contribution! 

So what about you? It’s easy to check.  It’s tax bill time.  You need to take a peek.  When you’re buying a home, there’s so much to do.  I get it.  Movers, boxes, utility changes, address changes and so little time.  Some people are just better at attacking it with vigor, but sometimes things just slip through the cracks and today’s blog post is going to be that niggling reminder to make sure you aren’t leaking money into the tax coffers of your county.  This is what it looks like on the tax bill if you have already filled out the form.  You’ll see the $7,000 Homeowner’s Exemption if you have it. 

You’re entitled to claim it for the future because here’s the thing… there’s a law on the books that tells the county you’re entitled to it!  The unfortunate part is that it is NOT retroactive.  You just need to get your form in!  Links for the tri-county area around Sacramento appear below. 

If you live in a home you own in other parts of California, find your county assessor’s office here or check your latest tax bill.  

You can’t claim it on multiple houses such as one you own as a rental, a vacation home, or even a second residence – only ONE is allowed.  An elderly parent who is moved permanently to a care facility cannot claim it anymore either. If you are claiming a Disabled Veteran’s Exemption, then you can’t claim the Homeowner’s Exemption, but if you live in one home that you own – it’s yours to claim. 

Plus, there’s NO cost to apply for the Homeowner’s Exemption. See your County website for additional FAQs or call them.

Note: The form name and layout is the same for each county but the county information at the top is different.

Sacramento County Homeowner’s Property Tax Exemption Form

Placer County Homeowner’s Property Tax Exemption Form (look under Exemption Forms)

El Dorado County call the Assessor’s Office at 530-621-5719

Found Money

And while I’m on this kick of trying to save you money, check out the State of California’s unclaimed property website.  I found I had $47.89 from an old phone company (MCI) from over 25 years ago!  Too bad they aren’t paying interest!   https://ucpi.sco.ca.gov/UCP/

 

Tax saving strategies

On another note, Oct 16, 2017 represents the date that a lot of business owners and investors file and pay taxes for 2016 on extension and many recognize that they should have invested more (ask me how I know!) They start looking for more properties to write-off for next year.  If you find yourself in a similar situation, I’d be happy to help you find investment properties.  The last 3 months of the year are the perfect time for the hunt!

Money making strategies

Did you know that after Hurricane Katrina that the government needed to incentivize revitalizing and rebuilding of the affected areas so they created the Go Zone Act?  Under the GO Zone Act, taxpayers were allowed an additional depreciation deduction equal to 50% of the depreciable basis of qualified Gulf Opportunity Zone (GO Zone) property for the first year the property was placed in service (rented). This additional first-year depreciation deduction was calculated after any Section 179 deduction, but before the regular depreciation deduction.  There will likely be a similar Act for the areas of Hurricanes Harvey and Irma.  Want to know more details, contact me.

 

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