Lowering the tax liability on your El Segundo rental property is definitely worth the effort if you get the opportunity. Regardless of if you are new to rental property investment or a seasoned pro, analyzing your El Segundo property value assessment to determine its accuracy is time well spent.
At Real Property Management California Coast, we advise all our landlords to take the time to do this because they might discover that their assessment is too high, which once reevaluated can lead to lower property taxes. There are many ways to determine whether your current property assessment is correct.
How a Property Should be Assessed
Properties are usually assessed by a town’s or city’s assessor annually. In most cases, the assessor reviews the current status of your property, any improvements done, and the current market conditions for similar homes in your area, and then they multiply that by the area’s level of assessment as decided by the municipality. If you own a multi-family building, the assessor will include the income earned from the property over the past year minus maintenance costs into the valuation. The cost of replacing the home is also taken into account in determining its assessment.
If you open your yearly property tax bill and almost collapse from shock at the figures, take some deep breaths and then carefully think of your options to lower the tax bill. One thing to remember, however, is that there is a deadline to dispute the assessment. Most municipalities will offer you 30 to 60 days after you receive the assessment to challenge it.
How to Understand an Assessment
Observe what the assessment says about your property. You may find that you’ve suddenly become the owner of an El Segundo property that is nothing like the one you actually have. For example, the assessment might incorrectly give your house four bedrooms when it only has three or place your address in an upscale neighborhood near your actual location. In one case, a homeowner’s one-story home with vaulted ceilings was wrongly listed as a two-story house and charged twice the actual square footage because the assessor viewed it from outside rather than doing a more detailed inspection.
The value of similar properties in your neighborhood can tell you a lot about your own property’s assessment. If you are friends with your neighbors, you might be able to learn from their assessment. Otherwise, it’s smart to compare your property with four or five other properties in your general location that have the same amount of square footage and the same property size.
Look into Exemptions
While you’re taking the time to ensure the valuation of the property is right, also check whether you’re receiving any exemptions for which you’re eligible. Some states and many municipalities give breaks to owners who are senior citizens or veterans, have homes located in certain areas, and have a number of other exemptions. Your local tax assessor might be able to help you find any tax breaks to which you’re entitled.
If the first tax bill after purchasing your property shows that its tax assessment value increased by almost 50 percent in one year, something that happened to an owner in Georgia, you’ll want to ask for a review to help you understand any changes. The majority of tax assessors are willing to informally explain your assessment. If you’re not satisfied with the informal explanation, you can make a formal appeal. Property owners who have followed this route say they’ve been able to substantially lower their assessments.
When you work with Real Property Management California Coast, we help you get the most out of your property and lead it to success. To learn more about the services we offer, contact us online or call us at 310-535-2150 today.