Autumn Young
 
  • Deputy Assessor
  • Phone: 408-299-5572

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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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Too Low to Assess: Properties with Less than $5,000 in Assessed Value

Where state law allows, the Assessor’s Office has regularly sought out efforts to eliminate property taxes for those businesses where the cost to assess and collect property taxes exceeds the property tax revenue generated.

In 2016 the Assessor’s Office recommended, and the Board of Supervisors passed, an ordinance permitting the Assessor’s office to automatically exclude properties with an assessed value below $5,000, eliminating the ad valorem property taxes for those properties. Fees and other non-ad valorem property taxes will remain on the tax bill.

As part of a continuous effort to seek out increased efficiencies, the Assessor’s Office conducted a formal cost study that demonstrated that the Assessor, Tax Collector and Controller’s total costs to assess and collect diminumus assessments of $5,000 or less, exceeds the $50 in property tax revenue that would have been generated from the assessment.

Typically these parcels consist of vacant property in remote locations with limited utility and marketability. In 2016, it was estimated that there were approximately 2,000 parcels that will benefit from low value ordinance. The ordinance will not apply to properties under the California Land Conservation Act (CLCA), Mills Act (historical) contracts, timber production zone designation (TPZ), non-profit golf courses, and low-value properties that are component parts of larger total property economic units.

The “too low to value” ordinance that passed in 2016 applied to real properties with $5,000 or less in assessed value, as well as business owners with machinery and equipment and businesses on government property. Combined, it was estimated that the annual cost to assess and collect taxes for these low value properties was approximately $1,895,000, which was far in excess of the projected property tax revenue of $602,000. Every employee in the Assessor’s Office use daily a cost accounting system which enabled the assessor’s office to provide the Board of Supervisors with these estimates. Additionally, the Assessor’s Office will be able to reallocate an estimated 11,000 hours towards more complicated assessments and customer service.

Attachments

Low Value Ordinance The Assessor introduced the low value/minimum assessment ordinance adopted by the Board of Supervisors which provides property tax relief to thousands of small businesses. The ordinance exempts from taxation all business property where the aggregate assessed value is less than $10,000. The ordinance is aimed at assisting taxpayers in which the cost to assess and process tax collection exceeds the total revenue generated by the tax.
Silicon Valley Business Journal 2016 Santa Clara County tax break will primarily benefit small businesses.
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The Santa Clara County Board of Supervisors unanimously approved County Assessor Larry Stone’s recommendation to dramatically increase the number of property owners eligible to receive a “too low to assess” exclusion, benefitting mostly small business owners. (See today’s Board Agenda, Item: 125
 

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If you own the right property in Santa Clara County — really cheap stuff, and there is some of it around — there’s a holiday bonus coming to you. The Board of Supervisors unanimously approved a recommendation from County Assessor Larry Stone on Tuesday to increase the number of property owners who can take advantage of a “too low to assess” exclusion effective New Year's Day.
 

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County Supervisors unanimously approve proposal from Assessor Larry Stone

The Santa Clara County Board of Supervisors unanimously approved County Assessor Larry Stone’s recommendation to dramatically increase the number of property owners eligible to receive a “too low to assess” exclusion, benefitting mostly small business owners. (See today’s Board Agenda, Item: 125 http://sccgov.iqm2.com/Citizens/Detail_Meeting.aspx?ID=7206)

The new ordinance not only doubles the amount of the exclusion (from $5,000 to $10,000) for business personal property, it also adds two new categories of property eligible for the exemption.

They are:

  • Possessory Interests (a taxable possessory interest is created when a person or entity uses publicly owned real property) with a full value of $10,000 or less. The Assessor’s Office estimates approximately 1,200 businesses and/or individuals will no longer have to pay the tax. Examples of possessory interests include the rental of an airplane hanger at Reid Hillview, a booth at a convention center or a concession stand at the fairgrounds.
  • Real property and parcels with a total adjusted base year value of $5,000 or less. These parcels consist of vacant property in remote locations with limited utility and marketability. It is estimated that there are approximately 2,000 parcels that will benefit from this expansion of the low value ordinance. The ordinance will not apply to properties under the California Land Conservation Act (CLCA), Mills Act (historical) contracts, timber production zone designation (TPZ), non-profit golf courses, and low-value properties that are component parts of larger total property economic units.

“This low value ordinance is a ‘win-win’ for both the County and some taxpayers. For every $10,000 of assessed value, the county sends a tax bill of $100. The ordinance will eliminate property tax bills of $100 or less,” Stone said. In a formal cost study, Stone’s office demonstrated that the costs to the Assessor, Tax Collector and Controller to assess and collect diminumus assessments, exceeds the revenue generated.

“When I was first elected, I promised that the Assessor would not spend a dollar to collect a dime. I guess I need to update that; the Assessor’s office will not spend $100 to collect $100 dollars or less!” The new ordinance is effective January 1, 2017, The expansion of this ordinance to $10,000 for taxable personal property will primarily benefit business owners of property like business equipment, computers, fixtures and small boats. The Assessor’s Office estimated that 7,600 owners have total business property valued between $5,000 and $10,000, which would now be excluded from taxation. There are approximately 70,000 business property accounts filed in Santa Clara County each year.

“This is a perfect example of how we continue to do things differently,” said Stone. As Assessor I have implemented a sophisticated, at least by government standards, cost accounting system which has enabled the assessor’s office to utilize data to continuously review opportunities for making the department more efficient and smarter. Stone’s recommendation to the Board of Supervisors estimated that the cost to assess and collect these low value properties was approximately $1,895,000, which is far in excess of the projected property tax revenue of $602,000. Moreover it enables the assessor’s office to reallocate approximately 11,000 hours of staff time toward more significant assessments such as commercial and industrial assessment appeals, changes of ownership, and new construction activities.

While business property owners must continue to file a Business Property Statement (Form 571) each year detailing the cost of all supplies, equipment, improvements and land owned at each location within Santa Clara County, they will not have to pay the tax if the assessed value of their property is less than $10,000. “The real benefit is customer service and maintaining public confidence that government can run efficiently,” said Stone. Assessor’s

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