Agent

What agents and clients should know about property taxes

Help your sphere understand the process
  • Although most counties throughout the U.S. follow a similar schedule, tax rates and assessments are not equal state to state or even county to county.
  • I would put my money on the assessor’s indicators over Zillow’s algorithm any day of the year!
  • There are two components to calculating secured property taxes: the assessed value and the tax rate.

It’s no secret. By now, your clients should have received the pale yellow envelopes from Joseph Kelly, the Los Angeles County Treasurer and Tax Collector. The first installment of secured property taxes for fiscal year July 1, 2016 to June 30, 2017 were due Tuesday, Nov. 1, 2016.

Whether your clients own a Brentwood bungalow or downtown loft, property owners need to get their money in by Dec. 12, 2016 to avoid being delinquent.

Although most counties throughout the U.S. follow a similar schedule, tax rates and assessments are not equal state to state or even county to county.

Tax facts

I recently had the opportunity to meet the Los Angeles County Assessor, Jeffrey Prang, who shared some interesting news.

It takes three separate Los Angeles County offices: assessor, auditor-controller, and treasurer and tax Collector to produce and account for your property tax bill and payment.

The assessor’s office still operates in a paper environment until next year, when it will digitize all 2,365,869 parcels.

6 ways empowered agents embrace disruption to drive success
Using technology to generate leads and win listings READ MORE

Tax bills may be paid with a credit card if an owner wants to rack up some major points, but they should be prepared to pay for them. The treasurer and tax collector office passes along a 2.1 percent credit card charge as well as a $5.95 processing fee.

Timely client conversations

Checking in with past, recent and potential clients this time of year is beneficial.

Clients who have recently purchased property may possibly not receive a bill in the mail. As they are still liable for the taxes, reach out and let them know that the tax is due.

Additionally, save them time by providing them with their assessor’s ID number and directing them to the Assessor’s webpage.

Tax bills are not necessarily easy to decipher. Some new homeowners may need a primer. Help them figure it out by referring to this site.

Some owners may feel their property has been unfairly valued. Although there is a specific process to contest the valuation, it can be very complicated. They may want to rely on you to walk them through the process. Use this resource to help them out.

Assessor value indicators property by property

The assessor’s office deals with property value (both land and improvements in the case of real property) to determine your tax bill.

As a 27-year real estate veteran, I am inclined to say that assessed value is a very reliable indicator of market value, especially when used as a ratio from past sales.

In addition, assessed values of two or more comparable properties can offer relative perspective on value — to both land and improvements.

Real estate agents can access tax records that display not only assessed values and sales information, but also a value range. This data has shown to be very accurate when complemented with external factors such as style of the home and seller’s motivation, for example.

Although a property owner may be inclined to rely on a “Zestimate” to determine market value, I would put my “tax” money on the assessor’s indicators over Zillow’s algorithm any day of the year!

Assessor value indicators by area

According to the assessor’s office; values are up across Los Angeles, but not equally.

Overall, Los Angeles County has seen a 5.5 percent positive change in 2016; with certain cities and unincorporated areas exceeding this substantially (see below) and none experiencing a negative change.

You can see the complete list of 2015-2016 city valuations (page 24) as well as much more information regarding values and taxes in the Los Angeles County Assessor’s Annual report.

Property taxes across the U.S. vary widely

Tax amounts are not equal across the board.

There are two components to calculating secured property taxes: the assessed value and the tax rate. Although a specific region may have relatively low property values, each local government can set its own tax rate.

The assessment is multiplied by the tax rate to determine the actual tax amount billed.

States don’t control the property tax rates and receive very little, if any, proceeds from property taxes.

New York state, however, does have the two most expensive counties in the country: Westchester and Rockland county homeowners pay approximately five to six times the national average in property taxes.

Homeowners who think their tax bill is too high do have two options.

  1. Petition the local tax board for a reassessment. Tax rates are set by law, but assessments are subjective and can be negotiated. Local governments have procedures in place to appeal values.
  2. Put their property on the market for sale and move.

Hopefully, this information will help you have that property tax chat with your clients because it’s about that time.

Desiree Lapin is a Southern California Realtor and head of Luxury Real Estate by Desiree Lapin of Sotheby’s International Realty.