A California listing agent is preparing a CMA for a home in a neighborhood where Proposition 13 has resulted in wide variations in property tax bills among similar homes. A buyer asks whether the property tax shown on the listing will be their tax after purchase. What should the agent explain?
Correct Answer
C) The property will be reassessed at the purchase price upon transfer of ownership, resulting in a new and likely higher property tax bill
Under California Proposition 13 (Revenue & Taxation Code §51), when real property is sold, a change in ownership triggers a reassessment to the current fair market value (typically the purchase price). The new owner's property tax will be based on this new assessed value at approximately 1% plus local overrides and special assessments, which is usually significantly higher than what the long-term previous owner was paying.
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Previous Question
A California real estate agent is preparing a CMA in San Jose. The subject property is a 4-bedroom, 2-bath home with 2,200 sq ft. A comparable property sold for $1,100,000 and has 4 bedrooms, 3 baths, and 2,200 sq ft. In this Silicon Valley market, each bathroom is valued at $15,000. The comparable also has solar panels worth $12,000 that the subject lacks. What is the adjusted value of the comparable?
Next Question
An appraiser in Riverside County, California is making paired sales analysis to extract the value of a swimming pool. Property A (with pool) sold for $625,000. Property B (no pool, otherwise identical) sold for $590,000. Property C (with pool) sold for $710,000. Property D (no pool, otherwise identical to C) sold for $678,000. The documentary transfer tax in Riverside County is $1.10 per $1,000 of the sale price. What is the average market-derived adjustment for a swimming pool based on these paired sales?