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Property tax is an ad valorem tax on the value of a property. The tax is levied by the governing authority of the jurisdiction in which the property is located. In Humboldt County, our median property tax is currently set at a rate of 1% of the property's value. When a property sells (change of ownership), or when new construction is completed, the property taxes are determined by the appraised value at that time. You might be asking yourself, "Well, don't property values consistently fluctuate?", and the answer would be, yes, they absolutely do, which further magnifies the ramifications of when you buy (or build). If your transaction closes at the peak of the current market, your property tax will be tied to that peeking number, but do not fret, because much like that five dollar bill you find in your jean pocket on laundry day, Proposition 8 is the ace up your sleeve that you didn't even know was there! Proposition 8, which passed in November 1978, amended Proposition 13 to recognize declines in value for property tax purposes. Proposition 8 decline in market value assessments, are temporary reductions that recognize the fact that the market value of a property as of the January 1st lien date has fallen below its Proposition 13 factored value. Meaning, if your property's value dips below the amount you paid for it, you can have your property taxes adjusted to reflect that lower number, to help save some money. This doesn't just happen automatically, you would have to trigger this by contacting the county assessor's office, and supplying them with evidence of this fluctuation of value. The 'evidence' almost always comes in the form of a CMA (Competitive Market Analysis) which a knowledgeable real estate agent should be able to provide you with ease. If you'd like to read more about Prop. 8 and the process of reducing your property taxes, click the link below, and if you have any questions, please do not hesitate to reach out!
- https://humboldtgov.org/234/Proposition-8 -
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