California property tax assessment carries a hefty price tag for both home owners and businesses. However, a bill for a business property tax California can be even more significant, because it bites into revenue, whereas the home property tax bill is factored into the affordability of your domicile.. It doesn’t matter if you are paying a San Francisco property tax or a San Diego property tax, because the amount is high throughout the entire state. Thankfully, there are options for reducing those property tax bills.
California Business Property Tax Assessment in 2020
This past year, Proposition 15 was brought to the voters. This proposition was designed to circumvent Proposition 13 for business owners, which has been capping California property rates since it was implemented in 1978. Proposition 13 protected all California property owners from unfair tax assessment levels.
Proposition 15 would have raised the business property tax California significantly. The increase would have been enough to bring in an additional twelve billion dollars in revenue. While that would be good news for the state, it was bad news for all the small businesses in California. The California property tax assessment increase would have made small business owners change how they ran their business. Those changes would have included raising prices for consumers, laying off employees, or reducing the number of hours each employee works each week.
Thankfully Proposition 15 was defeated back in November. This is excellent news for many commercial business property owners. However, in this unprecedented year, it may not be enough. The downturn in the economy may still have all bills for business property tax in California higher than what most businesses can afford.
Requesting a Business Property Tax California Reduction Due to COVID-19
The state of California utilizes January 1st as the date for assessed values of all properties. This “snapshot in time: is called the lien date. Most years, this is not an issue. But 2020 presented a massive curveball to everyone. The pandemic was not around back in January of 2020 when the assessments were calculated. That means the assessments are incorrect. There’s no doubt that Covid-19 has impacted your investment property value.
Since businesses were not significantly impacted by Covid until March of 2020, there is limited (if any) relief available for the 2020 tax year’s assessment. Even if you tried to request a California property tax assessment reduction through the appeal process, the assessment is based on the valuation as of January 1st. Subsequent Covid impact for the rest of the year could be dismissed by the Board of Appeals In normal times, Boards are willing to consider comparable sales valuation three months of either side of the lien date, but values hadn’t been impacted by the end of March.
The first thing you must do when considering a business property tax California reduction is address the 2021 year, and anticipate what your property was worth on this year’s lien date, nothing the economic impact of 2020. Then you need to determine what the assessed value will be according to the Assessor. That assessed value can be found on your property tax bill. And it is actually written as the enrolled value. You can also find this value on the Assessor’s website after the tax roll is processed, normally in June/July.
Since the chances of the assessed value being reduced arehigh, the time to start planning the process of challenging your assessment and gaining a reduction is now.
Here are your options if you are looking to lower your San Francisco property tax, Los Angeles property tax or your San Diego property tax assessment Ask yourself the question, “Was your commercial building, apartment, warehouse, mixed-use building, or office space half empty back on January 1, 2021?”. If you answered yes, then it will be deemed that the assessed value will be less. This is due to the fact the building may not be able to be filled to capacity thanks to the recession and COVID-19.
Appealing Your Business Property Tax California
When you are ready to appeal your California property tax assessment, you need to ask for a copy of the Application for Changed Assessment. There is no fee for this form, and it must be provided to anyone who requests it. The county you live in may charge you a fee to process the application though. Therefore, you must check to see if you will be charged when you are appealing either a Los Angeles, San Francisco, San Diego or any other California countyproperty tax assessment.
Once the form has been filled out, it must be filed during the filing period. The normal filing period is between July 2nd and September 15th or November 30th (Depending upon which county your property is located..
There are two other exceptions for filing an appeal for business property tax California. One exception is not receiving the assessment at least fifteen days before the deadline to file. The other states the appeal can be filed within twelve months if there is thought to be an error within the assessment itself.
A hearing will be held after your application is received. You must be present at this hearing. If you are not, and do not have everything in writing and signed in advance, your appeal will be denied. There will be no second chances for an appeal either.
If your appeal hearing is not held prior to the due date of your California property tax assessment, you are still responsible for paying what you owe. You will receive a refund of any overpayment if and when your appeal is successful.
COVID-19 has been brutal on 2020 was and 2021 will be no joy ride either. If you have been looking for ways to lower your Los Angeles property tax bill, San Diego property tax bill or your San Francisco property tax bill, you start planning right away. Your commercial building may have declined in value and you will want to take advantage of the property tax reductions. After all, paying less in business property taxes will mean your business is in the black and still profitable after a tough year.
Tackling a California property tax assessment reduction is not an easy task. While you can do it on your own, it is always best to have a professional do the heavy lifting for you. There are many reasons for this. One is the fact you are too busy running your business to deal with any extra headaches. Another reason is a professional will get you the results you desire, whereas you might not get any further than filling out the paperwork.
Jay is a founding partner of the property tax firm of Grant Lee Bradley, Inc. For the past 20 years he has led his company to be one of the top property tax consulting groups in California, Nevada and Arizona. Grant Lee Bradley is an elite group of property tax consultants dedicated to effectively contesting and collecting overpaid property taxes.
His clients include QUALCOMM, Siemens, Merck, PerkinElmer, SeaWorld, Fujifilm, Solar Turbines, Panasonic, DuPont, BD, LabCorp, Dell, Lockheed Martin, AirGas and many other Fortune 1000 companies.