Los Angeles County Property Tax Official Informs Palisades Optimists

By Sue Pascoe

On Radcliffe Avenue, the homeowner’s builder left only a garage door frame standing following demolition, yet the permit on the fence listed the project as a major remodel, not new construction. Once the two-story house was nearly completed, including a newly built garage door frame, the initial frame that had been left standing was taken down.

When Carol Wong Quan, public affairs spokesperson for Los Angeles County Assessor’s Office, spoke to the Palisades Optimist Club on Aug. 22, she was asked if the homeowner/builder would receive a property-tax break because the project was called a remodel, rather than all-new construction.

“Urban legend. It will be assessed as new construction,” said Quan, who noted that even a reconstructed home with just one wall left standing is assessed as new construction.

Carol Wong Quan, a special assistant, public affairs for the Assessor Los Angeles County Assessor’s Office, spoke to the Pacific Palisades Optimist Club.

She was asked why some homeowners call home construction a remodel if they know it will still be taxed by the county as a new home. “Easier to pull permits from the city,” she said.

(In a July 2016 article, the News contacted Luke Zamerini, chief inspector for residential inspection for the Department of Building and Safety, and asked for clarification on a remodel vs. demolition. He replied, “When a structure is completely removed, it is considered a demolition. If any portion of the structure remains and is built upon, it is considered a remodel.” He added that the Los Angeles building code does not define a remodel.)

Quan reviewed Prop. 13, the 1978 proposition that substantially reduced property taxes and limited future annual increases to 2 percent. She cited four events that can cause a home’s reappraisal:

1.) A change of ownership (death is considered a change of ownership); 2.) New construction; 3.) New construction partially completed on the lien date (January 1); 4.) A decline-in-value.

She told the optimists about a couple that had passed away, leaving their Prop. 13-protected home to their children. Because the kids had inherited the home and it was theirs, they failed to notify the county assessor’s office at the time of the couple’s death, and the property continued to be taxed at Prop. 13 rates, instead of jumping to current rates.

The property came to the assessor’s attention at a later time, possibly when the children sought a loan. With penalties (even though the house went to the children) they now owed $26,000 in back taxes for the first three years after the couple’s death, with another $26,000 due for subsequent years. The county assessor was able to help them through the process— “Claim for Reassessment Exclusion for Transfer Between Parent and Child”—and clear most of the penalty. Quan warned that the assessor’s office has to be notified within 150 days of the date of the homeowner’s death. Even if the property is held in trust, a “Change in Ownership Statement, Death of Real Property Owner” must be submitted to the Assessor’s Office.

She also spoke briefly on Propositions 60 and 90, which allow a person or their spouse who are 55 or older, the ability to buy or construct a new home of equal or lesser value than the existing home and transfer the Prop 13 low tax value to the new property. Quan emphasized that this is a one-time benefit and once you or your spouse have received this tax relief you can never file for it again. Prop 60 relates to intra-county transfers and Prop 90 relates to inter-county— there are 11 counties in California that honor will it.

Wondering if you can transfer your property, without a reassessment, to a grandchild, bypassing a child? Yes, under Proposition 193, if three conditions are met: 1.) Property must be owned by grandparent; 2.) The child must be deceased; and 3) the “Claim for Reassessment Exclusion for Transfer from Grandparent to Grandchild” form must be submitted. Prop 58 addresses the transfer between parent and child and defines a child as a son, daughter, son-in-law, daughter-in-law, stepchild or child adopted before the age of 18. Spouses of eligible children are also eligible until divorced or if terminated by death— until the remarriage of the surviving spouse.

Quan said the county assessor has a new website (assessor.lacounty.gov) that provides answers to commonly asked questions, and includes a Guide to Decline-in-Value, which happens when the market value of a property is less than its current assessed value. The website also highlights upcoming legislation that may impact homeowners.

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