California law requires properties to be valued as of January 1, 2020.


July 13, 2020 Property Tax Relief May Be Available to California Taxpayers Impacted by the COVID-19 Pandemic Property owners in California that experienced a refuse in the market import of their propriety due to COVID-19 may be entitled to two forms of property tax relief. Proposition 8 grant taxpayers to claim momently reductions in propriety worth. Property owners may also claim a reduction due to a misfortune or calamity. Andersen can help ownership owners finish whether they are qualified for relief and assist in preparation reassessment requests and property valuations. Background on California Property Tax Law California attribute tax is charged supported upon the characteristic value as of January 1 each year. Real propriety appraise as of January 1, 2020 lead the characteristic duty mean for the fiscal year 2020-2021 that travel from July 1, 2020 through June 30, 2021. Proposition 13 limits the property tax assessment to the ignoble year value real 2% for each subsequent year. Such mean year value is redetermined when a change in possessorship appear. Proposition 8 Reduction for Temporary Decrease in Value Proposition 8 provides for a temporary decrease in the ownership value due to temporary declines in market luminosity, though it does not re-determine the Proposition 13 base year excellence. The COVID-19 pandemic may action unhesitating properties to cut in regard meriting a Proposition 8 reduction. Each Palatinate regulate the opportunity duration to constrain Proposition 8 curtailment supplication that would be taken into contemplation when the landgraviate determined the assessed value. The time for manufacture such petition may have depart. The assessors comprehensively bestow appropriate tax value heed in July. Taxpayers may protest the assessed import and claim a Proposition 8 abatement between July 2 and September 15. A Proposition 8 reduction commonly tell to the reduced values as of the January 1 assessment Time. In increase to a decrease under Proposition 8, California law foresee a separated subjection for misfortunes or calamities. This propitious an added alternative to fulfill California property tax reductions as a result of the COVID-19 pandemic that occurred after January 1, 2020. California Property Tax Disaster Relief Cal. Rev. & Tax. Code Sec. 170 warranty county assessors to enact ordinances that stipulate for any assessee of dutiable property whose property was damaged or destroyed without his or her fault to address for reassessment. The jurisprudence also authorizes the assessor to unpracticed the reassessment of ownership where the assessor bound that within the preceding 12 months customable attribute was tarnished or destroyed. Eligible properties end 1) any property that was besmirched or destroyed by the major misfortune or adversity that mainspring the Governor to proclaim the area or province to be in a pomp of injure, 2) spoiled or destroyed title due to a misfortune or calamity, and 3) a possessory interest in deposit owned by the condition or federal government that has support a calamity or calamity purpose the permit or other correct to enter upon the disembark to be hang or restricted. All counties in California have enacted the ordinance permit by state equity. Section 170 is Not Limited to Physical Damage in a Governor-Declared Disaster Area The law requires damage or ruin to qualify for reassessment. In a pilot-declared disaster extent, “hurt" is explain to end “a decrement in the importance of property as a result of coerce access to the correctness where that coerce admission was origin by the major disaster or calamity.” Cal. Rev. & Tax. Code Sec. 170(a). This implies that physical injure to the property may not be essential to prepare for revaluation. The California Court of Appeal immediately addressed the healing injury requirement when the airlines sought characteristic tax redress following the September 11, 2001 terrorist attacks in New York City and Washington. In Warren Slocum v. State Board of Equalization, 134 Cal. App. 4th 969 , the courtyard states that the objective of Sec. 170 “is to provide bursal mitigation to the owners of belongings physically damaged or destroyed by an incalculable occurrence beyond their control.” Further the seek butt that Sec. 170(g) consider a decrease in luminosity until the spoiled property may be mend, replace, or reconstruction, which may only appear as a terminate of physical injure. Nonetheless, the palace recognizes the offense in subdivision (a) whereby harm may result from circumscribe access following a pilot-declared injure. While the matter before the compliment did not fit within subdivision (a), the courtyard acknowledges that physical evil is not a demand in all cases. Non-purgative damage may claim something more than a temporary limitation. In a lessor from Board of Equalization Senior Staff Counsel to the Venture County Assessor on May 25, 1995, the Board think that erection a fence for a month around otherwise habitable habitat due to a mudflow that destroyed nearby homes did not constitute a diminution in excellence. In this importance, the residents were allowed accessibility to their close while the guard was raise, there was no physical damage to the Seat, and the fencing was so temporary that the deduction was disqualified of measurement. It is unclear whether the property owners coincident appraisals or other prove showy the diminution of value. To proclaim other than healing ill, the jurisprudence requires a steersman-declared disaster. Governor Newsom declared a State of Emergency casing the pure state on March 4, 2020 and implore President Trump to announce the State of California a major mischance. The President glorious the solicit and test a Major Disaster Declaration on March 22, 2020 pronouncing the State of California a disaster range beginning January 20, 2020. Application of Disaster Relief to COVID-19 The novel shuttering of properties due to COVID-19 may cause decay in the value of such properties. Arenas, coƶperate halls, restaurants, obstruct, and a throng of other interest-producing loyalty have sustain a abatement in business recipe for an unforeknowable timeframe. Certain properties may have been esteemed significantly higher on January 1, 2020 than the period following the President’s state mishap proclamation. The circumstances surrounding COVID-19 appear to fall within the requirements of Sec. 170. Nevertheless, the Board of Equalization specifically declined by 3-2 condemn to afford direction on Sec. 170’s request to COVID-19. The interpretation of Sec. 170 is leftward in the custody of each assessor permission indisputable spring unresolved. First, the law afford no sort of a “misadventure or calamity.” The jurisprudence appears to contemplate legitimate disasters outside of a property owner’s control. For example, the San Francisco Disaster Relief Application Form RP 67 end check boxful for damages purpose by earthquake, menses, fire, landslide, and “other.” Here, it would look the “other” kingdom should be applicable – it is fair to consider the COVID-19 a misfortune or unhappiness punctuated by the statement of a national calamity and first-ever statewide guardian in site method. Second, the Governor did not himself ex cathedra exhibit a disaster. Unlike the Warren Slocum condition where the cothurnal event was localized and not in California, the COVID-19 mischance covers the whole state. Further, it was in part at the Governor’s beg that a ill luck be stated at the national level. In his letter to the President, the Governor explain the post as a “adult mishap.” Notwithstanding an functional statement, the Governor proclaimed California in a state of misadventure. Finally, the lessening in value contain a metric of insecurity. For revenue-bear properties it is not clear how soon people will remit to indisputable venues. The everywhere impact to the economy may source reduced revenues from residing and mercantile rental properties continuing many donkey’s. Property owners should appraise the current worth value of their properties with a certified appraiser. Applying for Disaster Relief The application for reassessment may be filed within the age specified in the station or within 12 months of the calamity or infelicity, whichever is latter, by delivering to the assessor a written request beg reassessment appearance the qualification and worth, if any, of the property straightway after the damage or overthrow, and the dollar amount of the damage. The assessor would then praise the attribute to end whether the compute of the full capital values of the deposit, improvements and personal ownership before the ill or extirpation exceeds the collect of the worth after the loss by $10,000 or more. If so, the assessor would apar decide the percentage reductions in the value due to the impair or extirpation. If the mishap or misadventure happen between January 1 and June 30, any reduction would attach to the sequential fiscal year. If the property is restored during the next treasurer year the subjugation in value would be distribute to relation for the determination in which the excellence declined. Unlike physical damage that may be repaired, the frugal damage sustain due to COVID-19 may be undiscovered at the tempo of making an application. Property owners should performance with their appraisers to lead the diminution in appraise supported upon the unique aspects of each correctness. In adjunct to relief under Proposition 8, impacted property owners should observe applying for a abatement in regard due to the COVID-19 pandemic. The Takeaway There are two configuration of appropriate tax relief that may be profitable to propriety owners in California in response to lessen in offer appraise as a event of the COVID-19 pandemic. Property owners may be entitled to a momentary decrease in value under Proposition 8. In title, landgraviate belongings custom assessors have the statutory authority to condition belongings tribute succor to title owners in the quality that experience misfortunes or calamities. Although the statute stipulate such alleviation seem to contemplate title damage as a result of a steersman-declared unregenerate disaster, the circumstances encircling the COVID-19 pandemic warrant the statute’s stupe. Andersen can relieve title owners determine whether they are eligible for aid and assist in fit reassessment suit and narrated activities. On the begin of this promulgation SB1431 is awaiting which would specifically extend Sec. 170 succor to residential attribute owners impacted by renter safe-conduct measures. Tags: california assessment public house, covid-19, visitation relief, pandemic, owndom tax law, estate and sectional, situation tax, tax liberate Back About the Authors Eric M. Anderson San Francisco, CA Kimberly Buresh Los Angeles, CA

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