What are Property Taxes?
In each state of the US, you can find property taxes that tax you for your belongings. Each household is obligated to pay these annually for their personal belongings. Having that said, what things are obligatory to be paid regarding your property and which aren’t? Personal property is everything movable and not attached to a home or building.
Businesses, for instance, have all their movable assets categorized under the property tax, but on the other hand, homes, land, and buildings don’t fall into the category of property tax.
Personal Property Taxes in California
Any tax in each state, including the personal property tax, has its rates independently-determined. This means tax rates can vary depending on the state. California, for that matter, has the personal property tax limited by Proposition 13 voted in 1978 by California voters. This tax has two features you have to pay attention to.
- The general property taxes are limited to 1% of the market value of a specific property. However, that 1% does not contain the tax collected for particular purposes.
- Additionally, the amount that can increase annually as per the assessed value of the property is limited to 2%.
Because of these two features, the California personal property taxes are lower than the national average. With that said, the national average is 1.08% currently, and the California average is 0.77%. Many people find this quite helpful.
How Do Property Taxes in San Gabriel Valley, California Work?
Each city in the San Gabriel Valley has its right to vote on specific taxes and measures that can raise or lower the property taxes. However, generally, all property taxes in San Gabriel Valley are created based on the purchase price of the property you are paying for. This means that what you paid initially forms your property tax, and it cannot be increased for more than 2% annually as per Proposition 13 mentioned above, regardless of the rate of inflation. Admittedly, for people living anywhere in San Gabriel Valley for a long time, their assessed value of the personal property will be lower. However, this is also very beneficial for residents of San Francisco and San Jose, where rapid growth of property prices was noticed in recent years.
We recommend reducing your assessed value by $7,000 of your new-purchased property if you plan to live there long-term. This saves you $70+, which, of course, builds up over time. Note that you can only do this once for the property you’ve purchased.
If you’re looking into property in San Gabriel Valley, CA, feel free to take a look at our vast offer in the area and beyond in the other communities.
Assessed value and the property tax
All property taxes are applied to the values which have been determined for your personal property. All counties and communities within California have the same rule. That is why in San Gabriel Valley, you pay 1% of the assessed value that has been determined annually. Also, the personal property tax, when compared to the other taxes, is the single most substantial tax you have got to pay. The rest of the taxes vary from county to county and state to state.
Speaking of other taxes, apart from the property tax, in the cities in San Gabriel Valley, you will have the ‘Mello-Ross‘ and other voter-approved taxes. To be determined whether other taxes should be paid and how much, people living in any of the cities in the Valley gather and vote on various taxes with which they will support the community through financing for public improvements. To get you a general idea of how much you will pay approx. For the property tax plus the rest of the taxes, always take 1.25% as a good rule of thumb. 1% goes for the property tax, and the 0.25% is generally enough for the rest of the smaller taxes that have to be paid annually too.
As per the national tax calculator, cities in San Gabriel Valley, on average, collect 0.56% of a property’s assessed market value. That being said, if you have a home in this area that has its assessed value to $508,800, you will pay $2,989 per year. With that, most of the cities in San Gabriel Valley rank around the 160th place of the 3143 counties – being among the highest property tax rates on average. And the residents pay approx. 3.68% of their yearly income on the property tax, while San Gabriel Valley makes the 325th of the 3143 counties for property taxes as a percentage of median income.
How is the property tax calculated?
Several factors determine your annual tax rate per property, but the general calculation of your property tax is determined based on your assessed value. Then, the local tax office takes the current assessment rate into account, too, together with any tax exemptions or reductions you might have filed, which helps them calculate the yearly fee.
As for the factors that determine your annual tax rate per property, see them listed below:
- Property Tax
The base of the tax is calculated by multiplying the assessed value of your home with all the tax rates that apply. The final amount you get is what you’re obliged to pay but does not include any exemptions, penalties, or special assessments. At that base, there are the exemptions, penalties, and special assessments calculated, added, or subtracted. Those are responsible for your base growing (penalties) or being lowered if you filed for reduction or with any other special assessments.
*As previously mentioned, once the base of the property tax is determined and all the exemptions, penalties, and special assessments and calculated onto it, it represents the single largest tax fee you will pay each year. Then, the people in San Gabriel Valley or Los Angeles County have the authority to vote on any other taxes to be paid on top of that, which will be public revenue for improvements within the city or county.
- Assessed market value
Unless your house has had a change in ownership or new construction, the assessed market value for it will be calculated based on the 1975-1976 market value. It will also be adjusted (up to 2%) for inflation based on the California law. However, if you have had any new construction done or the ownership was changed afterward, the value on which the tax will be determined is the market value of the property as of the date it was newly constructed or changed ownership.
- Taxable value and exemptions
Depending on your specific case, exemptions will vary as the state of California has many partial and full exemption options with which your annual tax base can be decreased.