How does property assessment work in Los angeles county at the time of property sale and transfer? Is the new assessment based on the sale price? Is that guaranteed in law?
Answer
The new assessed value is supposed to be the market value. Market value is defined as the price at which a willing buyer and a willing seller will make an exchange in the absence of fraud, mistake, outside influence or duress. So if the sale is arms length and for full market value, that will be the new assessed value. It is not guaranteed by law, however, because property may change hands at below market value for any number of reasons. So if the property is sold at a discount the assessor has the right to base the assessment on what the property would be worth had it sold on the open market.
Answer
The system for evaluating property for determining property tax is statewide, and is not county specific, although it is implemented by the county tax assessors for the various 58 counties in California.
Proposition 13 established an "acquisition value" system, rather than a current value method for assessment of property ta. Under this system, real property is assessed at its 1975-1976 full cash value (adjusted for inflation). If the property is purchased, newly constructed or changes ownership after the 1975 assessment, it is revalued (reappraised) at current market value for property tax purposes.
There are statutory exemptions from reassessment, which must be timely claimed to be of use. If necessary, you should speak to an attorney in your area that is familiar with these laws to properly claim an exemption from reassessment.
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