Many investors have lost income this past year, and it comes hand in hand with paying property tax in California. These taxes payments are going to be due later this year and investors and business owners are wondering if their California property tax assessment will change due to the current circumstances. While one can hope the California counties will be proactively lower assessments this COVID-19 impacted year, don’t hold your breath.
January 1, 2021 Lien Date – Snapshot of Covid Impact for This Year’s 2021-22 Assessment
While (fortunately) many commercial real estate sectors will experience a rebound this year, the valuation of this coming year’s assessment is based on a “snapshot” of the value of property as of January 1. Your California property tax assessment will not be a fair evaluation of 2020.
California Revenue and Taxation Code Section 117 says the “lien date is the time when taxes for any fiscal year become a lien on property.” The word lien relates back to the Latin verb ligare meaning “to tie or bind” and entered the English language from the medieval French noun meaning a “band or tie.” Thus placing a lien against someone or their property is a way of “binding” that property to show an obligation owed by that owner to the person who holds the lien. In this case the obligation is to pay the taxes and the “person” who holds the lien is the taxing entity. January 1 at 12:01 AM is the current lien date in California.
Thus, your property’s value is based up on the variables as they exist on that January 1 date, and reflective of the direct Covid-19 impact to investment property has had on your revenue this past year. Once again, not a fair evaluation of your California property tax assessment for a virus-plagued year.
California Property Tax Assessment: Appeal, Appeal, Appeal!!
Business property tax in California will be too high for 2020. Any commercial property type (outside warehousing and logistics facilities, which have not been adversely impacted for obvious reasons) need to be reviewed for lower assessment opportunities under the Prop 13 appeal process.
Now is the time to act to contact a consultant or group who specializes in California ad valorem representation. Each market, each location and each property type have been impacted differently in 2020, and you need a pro on your team to nail down the lowest available assessment.
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.