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CalTax Chief Tax Consultant David R. Doerr

Bills That Change Single-Family Zoning May Trigger Higher Property Taxes For Some Homeowners

California State Senate Bill 9 and Senate Bill 10 and other proposed legislation that up-zone single-family parcels may trigger higher property taxes for some homeowners, according to CalTax Chief Tax Consultant David R. Doerr.

In order to learn about this potential property tax increase, please click HERE to read Chief Tax Consultant David Doerr's commentary entitled; “Local Zoning Changes May Trigger Higher Property Taxes For Some Homeowners”.

Before or after reading the commentary, please also read David Doerr’s below email, which was provided in response to a query by Bob Silvestri (Editor of the Marin Post), that clarifies exactly which single-family properties may be assessed at a higher value, when up-zoning occurs.

Chief Tax Consultant David R. Doerr's Clarification:

“Prop. 13 provides a ceiling on property taxes but not a floor. Properties that have declined in value will be assessed less than their Prop. ceiling. There are thousands of such properties in California. Santa Clara County Assessor Larry Stone issued a recent press release stating that his office is proactively seeking to find properties that may have declined in value due to Covid 19 and need to be reassessed downward.

It is these properties that my commentary is directed, not all single family homes. Prop 13 still provides a ceiling on assessments.

When properties drop below their Prop. 13 ceiling, they are assessed pursuant to state law at their lower market value, based on the highest and best use. For owner occupied single family homes that are assessed below their Prop. 13 ceiling, there is an addition protection. They must be assessed as required by Section 401.4 of the Revenue and Taxation Code at their value as a single family home, even if the property is more valuable as a site for an apartment or commercial structure.

If the single family zoning is removed, it is some of these homes now assessed below their Prop 13 ceiling that will get a tax increase because they will be assessed at their highest and best use. However, the increase can’t cannot be greater than the ceiling determined by Prop 13.

I hope this clarifies which single family homes will see a tax increase if zoning restrictions are removed.

David R Doerr”

Tags

SB-9, SB-10, Tax Consultant, David Doerr, Up-Zoning, Single-Family zone, higher property taxes