Placer’s property value increase tops state
Placer County is tops in California in terms of assessed property value growth, according to the State Board of Equalization.
New statistics comparing counties show Placer values up 8.8 percent to $65.2 billion in 2015-16 from a year ago. Santa Clara County came in a close second, with growth of 8.7 percent.
New construction is one driver of the Placer County increase.
Michael Strech, president of the Roseville-based North State Building Industry Association, said that from the homebuilding perspective, an increase in assessed property values is an indicator of a strengthening market for houses.
“It means that it’s strong enough for our members to be doing what they do best, and that’s building new homes,” Strech said.
November figures from the organization showed another solid month of sales, with 307 new homes finding buyers in an area that includes Placer, El Dorado, Yolo, Yuba and Sacramento counties.
“And certainly we expect to see more and more of an uptick in property values as the economy continues to improve and our industry continues to grow,” Strech said. “In fact, by the time we report our end-of-year sales numbers in early January, we’re anticipating between 800 to 900 more new homes sold throughout the region this year than last.”
The increase can also be attributed to a review and adjustment of property tax assessments on houses in relation to Proposition 13 regulations, Placer County Chief Deputy Assessor James Lambeth said.
The assessed value is based on the lower of two values, the Prop. 13 value or the market value as of Jan.1. The Prop. 13 value is based on the market value of property when it was acquired, plus new construction – if applicable – and adjusted for inflation by no more than 2 percent per year. By using the lower of these two values, property owners are provided tax relief during times of increasing and decreasing property values, Lambeth said.
In recent years, many of these reviews have resulted in lower property tax assessments. In Placer County the assessor has reviewed properties since 2007 to recognize annual declines in property values throughout the county. By 2012, over 50 percent of residential and commercial property owners were notified of temporary reductions in their assessed values, he said.
“This past year we are continuing the trend started in 2013 of an improving local real estate economy,” Lambeth said. “This results in a large number of property owners continuing to see increases in their property tax assessment.”
The amount of the increase varies with the location of the property. The unincorporated areas of Placer County that take in Tahoe and Granite Bay have seen the highest increases in value, he said.
And an increase in value could trigger a larger increase in assessed value than the yearly maximum of 2 percent.
“If an assessment value has been temporarily reduced to its market value, the value may increase more than 2 percent,” Lambeth said. “Just as there is no limit to the amount of your property tax reduction, there is also no limit on the amount of increase when recovering from a reduction.”
The annual adjustments will continue until the market value exceeds the Prop. 13 value. When that occurs, the Prop. 13 value will be restored, and the assessed value increases will be limited to 2 percent per year, Lambeth said.
There are now 18 percent of properties in the county with a temporarily reduced assessment, and all other properties are limited to a maximum 2 percent increase each year, until the property changes ownership or new construction is added.
Lambeth said that with over 176,000 property values to administer and a complex set of statutory mandates the county is bound to follow, it is challenging to communicate with property owners about how and why their assessments have changed.
If property owners believe the county calculated their property value incorrectly, they have until Dec. 31 to contact the assessor’s office to request a review.