David K. Ginsborg
 
  • Deputy to the Assessor
  • Phone: 408-299-5588

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Property Tax Avengers video to aid new homeowners

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Santa Clara County Assessor Larry Stone revealed his alternate “superhero” personality, the “Property Tax Avenger.” Caught on film, Stone announced a funny and informative video to help new and prospective homeowners eliminate surprises about the most confusing part of purchasing a new home the “supplemental assessment.” “It’s very frustrating. You buy a home, think your property taxes were taken care of during escrow, or as part of the monthly mortgage payments, only to receive a supplemental assessment followed by a supplemental tax bill,” said Stone. “The first call they make is to our office. The Property Tax Avengers are on your side, and this new video will add to information online to help taxpayers reduce confusion about property taxes new homeowners are required to pay after escrow closes.

Playing on the “Avenger” theme, the lighthearted YouTube video is definitely not your typical government video with a talking head in front of a blackboard. Targeted toward individuals who just acquired or have plans to buy a home, the Assessor’s office is hoping to help more than 20,000 new homeowners a year, many of whom are young and first-time homeowners. “New homeowners want to know what to expect, how to quickly navigate the property tax system and opportunities for potential savings. The “Avenge Video” helps them do that and entertain them too,” said Stone.

Although supplemental assessments have been part of California property tax law since 1983, new buyers often overlook the financial impact that generally falls within their first year of ownership. Supplemental assessments and taxes are in addition to the annual assessments and property taxes which are generally prorated during escrow, so that the seller and buyer each pay the portion of taxes attributed to their time of ownership. However, the proration is based on the assessed value prior to the purchase transaction. The supplemental assessment is based on the difference between the prior assessed value and the new assessed value. This value is multiplied by the tax rate, and the resultant tax is prorated for the number of months remaining in the fiscal year from the date of acquisition by the new owner. The tax new homeowners pay is the amount between the regular tax bill prorated in escrow, and the supplemental tax bill, based upon the value of the property as of their date of purchase.

The Assessor and Tax Collector recognize that receiving the Notice of Supplemental Assessment and the supplemental tax bill often come as a surprise.
This “Tax Avenger” video adds to a collection of information on the Assessor’s website including a “Supplemental Estimator”that enables a new property owner to calculate the estimated taxes based upon the anticipated purchase price and month of acquisition. The “Estimator” assists taxpayers to better understand how supplemental assessments and taxes are calculated by the Assessor and the Tax Collector.

Why are there supplemental assessments?
Supplemental assessments were created in 1983 to close what was perceived as loopholes and inequities in Proposition 13. Prior to the creation of supplemental assessments, changes in assessed value due to a change in ownership or completion of new construction would not result in higher taxes until the tax year (July 1 to June 30), following the lien date when the new values were placed on the assessment roll. In some instances, taxes on the new assessments would not be collected for up to 21 months. This resulted in serious differences in tax treatment for transactions that may have only been separated by one day. For example, two houses closed escrow, one the day before the annual lien date and the other the day after; the value increase for each change in ownership was $500,000. The buyer who purchased the day before the lien date would pay taxes on the entire purchase price with the first installment of taxes no later than December 10 that year. The buyer who purchased the day after the lien date would not see the increase in taxes until the tax bill due in December of the following year. If both properties are owned for the same period of time, the buyer who bought a single day before the lien date would pay about $5,000 more in taxes than the other property owner due only to the differences in the initial transaction date.

Adjusting for time
With the implementation of supplemental assessments, the increase or decrease in assessed value is taxed from the first of the month following the date of completion of new construction or the change in ownership. That date is referred to as the event date.

An event date between January 1 and May 31 results in two supplemental Assessments and tax bills. The first supplemental assessment bill is from the first of the month following the event date for the remainder of the fiscal year. The second supplemental bill is for the subsequent fiscal year, beginning July 1 after the event date. If the event date is between June 1 and December 31, there will be only one supplemental assessment in effect for the remainder of that fiscal year.

The amount of the supplemental assessment is the increase or decrease in value as of the event date compared to the value that was previously assessed. Supplemental taxes are prorated based on the number of months remaining in the fiscal year, ending June 30. If the new assessment is lower than the prior assessed value a property tax refund results, rather than additional taxes.

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VIEW / DOWNLOAD MEDIA RELEASE

Property Tax Avengers video to aid new homeowners Test

prpttaxavg

Santa Clara County Assessor Larry Stone revealed his alternate “superhero” personality, the “Property Tax Avenger.” Caught on film, Stone announced a funny and informative video to help new and prospective homeowners eliminate surprises about the most confusing part of purchasing a new home the “supplemental assessment.” “It’s very frustrating. You buy a home, think your property taxes were taken care of during escrow, or as part of the monthly mortgage payments, only to receive a supplemental assessment followed by a supplemental tax bill,” said Stone. “The first call they make is to our office. The Property Tax Avengers are on your side, and this new video will add to information online to help taxpayers reduce confusion about property taxes new homeowners are required to pay after escrow closes.

Playing on the “Avenger” theme, the lighthearted YouTube video is definitely not your typical government video with a talking head in front of a blackboard. Targeted toward individuals who just acquired or have plans to buy a home, the Assessor’s office is hoping to help more than 20,000 new homeowners a year, many of whom are young and first-time homeowners. “New homeowners want to know what to expect, how to quickly navigate the property tax system and opportunities for potential savings. The “Avenge Video” helps them do that and entertain them too,” said Stone.

Although supplemental assessments have been part of California property tax law since 1983, new buyers often overlook the financial impact that generally falls within their first year of ownership. Supplemental assessments and taxes are in addition to the annual assessments and property taxes which are generally prorated during escrow, so that the seller and buyer each pay the portion of taxes attributed to their time of ownership. However, the proration is based on the assessed value prior to the purchase transaction. The supplemental assessment is based on the difference between the prior assessed value and the new assessed value. This value is multiplied by the tax rate, and the resultant tax is prorated for the number of months remaining in the fiscal year from the date of acquisition by the new owner. The tax new homeowners pay is the amount between the regular tax bill prorated in escrow, and the supplemental tax bill, based upon the value of the property as of their date of purchase.

The Assessor and Tax Collector recognize that receiving the Notice of Supplemental Assessment and the supplemental tax bill often come as a surprise.
This “Tax Avenger” video adds to a collection of information on the Assessor’s website including a “Supplemental Estimator”that enables a new property owner to calculate the estimated taxes based upon the anticipated purchase price and month of acquisition. The “Estimator” assists taxpayers to better understand how supplemental assessments and taxes are calculated by the Assessor and the Tax Collector.

Why are there supplemental assessments?
Supplemental assessments were created in 1983 to close what was perceived as loopholes and inequities in Proposition 13. Prior to the creation of supplemental assessments, changes in assessed value due to a change in ownership or completion of new construction would not result in higher taxes until the tax year (July 1 to June 30), following the lien date when the new values were placed on the assessment roll. In some instances, taxes on the new assessments would not be collected for up to 21 months. This resulted in serious differences in tax treatment for transactions that may have only been separated by one day. For example, two houses closed escrow, one the day before the annual lien date and the other the day after; the value increase for each change in ownership was $500,000. The buyer who purchased the day before the lien date would pay taxes on the entire purchase price with the first installment of taxes no later than December 10 that year. The buyer who purchased the day after the lien date would not see the increase in taxes until the tax bill due in December of the following year. If both properties are owned for the same period of time, the buyer who bought a single day before the lien date would pay about $5,000 more in taxes than the other property owner due only to the differences in the initial transaction date.

Adjusting for time
With the implementation of supplemental assessments, the increase or decrease in assessed value is taxed from the first of the month following the date of completion of new construction or the change in ownership. That date is referred to as the event date.

An event date between January 1 and May 31 results in two supplemental Assessments and tax bills. The first supplemental assessment bill is from the first of the month following the event date for the remainder of the fiscal year. The second supplemental bill is for the subsequent fiscal year, beginning July 1 after the event date. If the event date is between June 1 and December 31, there will be only one supplemental assessment in effect for the remainder of that fiscal year.

The amount of the supplemental assessment is the increase or decrease in value as of the event date compared to the value that was previously assessed. Supplemental taxes are prorated based on the number of months remaining in the fiscal year, ending June 30. If the new assessment is lower than the prior assessed value a property tax refund results, rather than additional taxes.

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VIEW / DOWNLOAD MEDIA RELEASE Temporary Property Tax Relief for Flood Victims Now Available

Earlier today Governor Jerry Brown issued a “Proclamation of a State of Emergency” for the counties impacted by the flood, including Santa Clara County. The proclamation gives the County Assessor authority to postpone the payment of property taxes due April 10. “With the April 10 deadline looming, it was critical for the Assessor’s office to receive this proclamation. I greatly appreciate Governor Jerry Brown’s swift action,” said County Assessor Larry Stone. To receive a deferral of property taxes, property owners will need to submit two, simple one-page forms. Reassessment of Property Damaged by Misfortune or Calamity Application (AKA: Calamity Claim for Reassessment.) The application for reassessment of property damaged by misfortune or calamity provides an opportunity for property owners to describe the extent of the damage to their property. “Property owners should do their best to submit the form as completely as possible. However, our office understands the magnitude of their circumstances. The main thing is to get the application into our office,” said Stone. The information on this form will be used to provide a temporary reduction in assessed value. The loss must exceed $10,000 of current market value. “This reduction in assessed value is available for all properties including homes, commercial and industrial buildings, and mobile homes. However, damage to vehicles and the contents of a home such as personal effects and furniture are not eligible for this tax relief because they are not assessable property.” said Stone. The form is available from the assessor’s website here. To look up your assessor parcel number, go to our website www.sccassessor.org. The form can be submitted electronically, by fax, mail or in person to the Assessor’s Office at 70 W. Hedding.

Property Tax Installment Deferral Application

Submission of this form enables qualifying property owners to defer payment of the next installment of property taxes. Completion of this second form enables the property owner to postpone payment of the April 10 bill without penalty or interest until the Assessor’s office has reassessed the property, and the Tax Collector issued a corrected tax bill. Payment will be required 30 days after receiving the corrected tax bill. To qualify for property tax installment deferral, properties with a homeowner’s exemption must suffer damage of at least 10% of its fair market value or $10,000, whichever is less. Properties without the homeowner's exemption require that damages exceed at least 20% of fair market value (not assessed value). Examples are commercial or rental properties. It is important to note that taxes paid through an impound account, do not qualify for a deferral.

Assessor’s Media Release Page 2 of 2 March 9, 2017

The forms can be submitted electronically, by fax, mail or in person to the Assessor’s Office at 70 W. Hedding. The Property Tax Installment Deferral Application must be submitted no later than 5 PM on April 10. The form is available from the Assessor’s website here.

The deferral of the April 10 property tax payment does not reduce taxes. “Rather it allows time for the property owner to focus on repairing their property without worry of penalties.” Later this year property owners can expect a property tax bill reflecting the adjustments and any outstanding taxes. “This is great news for homeowners and other property owners devastated by the flood. The last thing property owners should be concerned about right now are payment of taxes,” said County Assessor Larry Stone. “Should property owners have any questions they are urged to go to our website and if questions remain they should contact our office at 408-299-5500.

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VIEW / DOWNLOAD MEDIA RELEASE

Temporary Property Tax Relief for Flood Victims Now Available

Earlier today Governor Jerry Brown issued a “Proclamation of a State of Emergency” for the counties impacted by the flood, including Santa Clara County. The proclamation gives the County Assessor authority to postpone the payment of property taxes due April 10. “With the April 10 deadline looming, it was critical for the Assessor’s office to receive this proclamation. I greatly appreciate Governor Jerry Brown’s swift action,” said County Assessor Larry Stone. To receive a deferral of property taxes, property owners will need to submit two, simple one-page forms. Reassessment of Property Damaged by Misfortune or Calamity Application (AKA: Calamity Claim for Reassessment.) The application for reassessment of property damaged by misfortune or calamity provides an opportunity for property owners to describe the extent of the damage to their property. “Property owners should do their best to submit the form as completely as possible. However, our office understands the magnitude of their circumstances. The main thing is to get the application into our office,” said Stone. The information on this form will be used to provide a temporary reduction in assessed value. The loss must exceed $10,000 of current market value. “This reduction in assessed value is available for all properties including homes, commercial and industrial buildings, and mobile homes. However, damage to vehicles and the contents of a home such as personal effects and furniture are not eligible for this tax relief because they are not assessable property.” said Stone. The form is available from the assessor’s website here. To look up your assessor parcel number, go to our website www.sccassessor.org. The form can be submitted electronically, by fax, mail or in person to the Assessor’s Office at 70 W. Hedding.

Property Tax Installment Deferral Application

Submission of this form enables qualifying property owners to defer payment of the next installment of property taxes. Completion of this second form enables the property owner to postpone payment of the April 10 bill without penalty or interest until the Assessor’s office has reassessed the property, and the Tax Collector issued a corrected tax bill. Payment will be required 30 days after receiving the corrected tax bill. To qualify for property tax installment deferral, properties with a homeowner’s exemption must suffer damage of at least 10% of its fair market value or $10,000, whichever is less. Properties without the homeowner's exemption require that damages exceed at least 20% of fair market value (not assessed value). Examples are commercial or rental properties. It is important to note that taxes paid through an impound account, do not qualify for a deferral.

Assessor’s Media Release Page 2 of 2 March 9, 2017

The forms can be submitted electronically, by fax, mail or in person to the Assessor’s Office at 70 W. Hedding. The Property Tax Installment Deferral Application must be submitted no later than 5 PM on April 10. The form is available from the Assessor’s website here.

The deferral of the April 10 property tax payment does not reduce taxes. “Rather it allows time for the property owner to focus on repairing their property without worry of penalties.” Later this year property owners can expect a property tax bill reflecting the adjustments and any outstanding taxes. “This is great news for homeowners and other property owners devastated by the flood. The last thing property owners should be concerned about right now are payment of taxes,” said County Assessor Larry Stone. “Should property owners have any questions they are urged to go to our website and if questions remain they should contact our office at 408-299-5500.

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VIEW / DOWNLOAD MEDIA RELEASE

Another round of heavy rains have soaked many parts of Santa Clara County, and may have caused damage to properties due to flooding. County Assessor Larry Stone wishes to advise all property owners whose property was damaged during the recent flooding that property tax relief is available.
 
Stone said, “I strongly encourage all property owners who suffered flood damage to their property to visit the Assessor’s website at www.sccassessor.org to read about the calamity property tax relief program and download the claim form. They can also contact my office at (408) 299-5500.”
 
The calamity property tax relief program requires the property owner to file a calamity claim with the Assessor’s Office within 12 months from the date the property was damaged or destroyed. The loss must exceed $10,000 of current market value. Upon receiving the application, the Assessor’s office may issue a temporary reassessment that reflects the property’s damaged condition. The reduced value will remain in effect until the property is repaired or rebuilt. More importantly, after the property is rebuilt or repaired, the property can retain the previous Proposition 13 factored base year value if the property is rebuilt in a like or similar manner. That means that the property tax assessment will not increase beyond what it was before the flooding.
 
“This tax relief is available for all properties including homes, commercial and industrial buildings, and mobile homes. However, damage to vehicles and the contents of a home such as personal effects and furniture are not eligible for this tax relief because they are not assessable property.” said Stone.
 
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