A California homeowner's tax bill often dwarfs any other California tax owed, particularly for property purchased in recent years, when property values were high. If you own a California home, it's therefore in your interest to make extra sure that you’re not overpaying.
How can you reduce your California property tax burden? There are two main methods for doing so. The first is available to all homeowners. The second depends on whether you meet certain qualifications. If you meet those qualifications, you can seek tax relief using both methods.
You may know that the California authorities compute your property tax by multiplying your home’s taxable value by the tax rate. The taxable value is normally set based on the purchase price, but California authorities may reassess that value under certain circumstances, such as after you've made major home improvements.
Example: The assessor has placed a taxable value of $200,000 on the Ikedas’ home. If the tax rate is 1%, they will owe $2,000 in property tax. The Ikedas appeal, and the appeals board reduces that value to $150,000. Now, the Ikedas owe only $1,500 in property tax.
If you believe that the tax assessor has misjudged the value of your home – or if the taxable value is higher than that of similar homes in your area – you might want to pursue an appeal. For more information, read Should You Challenge Your Property Tax Assessment in California?, and Procedures for Challenging Your Property Tax Assessment in California.
California allows for reduced property taxes if you meet certain requirements. The chief programs in California are summarized here.
Contact your local tax assessor for complete details on these and other exemptions, including any required forms you need to complete and the deadline for filing those forms. You can get contact information for your county tax assessor from the California Board of Equalization list.
Depending on the complexity of your situation, you may want to seek legal help. To find an experienced real estate lawyer in California, check out Nolo’s Lawyer Directory.