Tax law requires the separation the value between the land and the improvements. The improvement value is for the structure that is built on the land.
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- San Bernardino County Assessor Property Data Files
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The most likely reason is that under California’s unique “Proposition 13” property tax system, the maximum assessment on real property is limited based on the value at the time it was acquired. This “base year value” cannot be increased by more than 2% each year, so it is normal for people who have owned their properties for many years to have lower assessments than neighbors who acquired the property more recently. The only other time a property’s assessment would reflect its current market value is if market value were to fall below the Prop 13 value limitation at some point in the future, known as a Prop-8 temporary value reduction.
In addition to the general tax levy of 1%, Prop 13 allows the tax bill to include bonded indebtedness (sewers, streetlights, etc.) previously approved by the voters to be added to the 1% general tax levy. This amount will vary across the county.
Proposition 13 limits the general property tax rate to 1 percent of the assessed value, plus an amount for the debt service on any bonds approved by popular vote. The tax rate will vary depending on where the property is located. You can obtain the exact tax rate for a particular parcel by contacting the San Bernardino County Auditor-Controller’s Office at 909-387-8322.
Under Prop 13, the law dictates that the taxable value each year can increase no more than 2%. If however, there is a change of ownership or new construction after 1975, this may require a re-appraisal, which would establish a new prop-13 base year value.
When there is an active market for the type of property being appraised, we compare it to similar properties that were recently sold. The process can involve anything from a simple comparison of prices of similar properties adjusted for any significant physical and locational differences, to a complex analysis of the rate of return investors expect for properties with similar income-generating potential. If there are not enough recent sales from which to draw a conclusion, the appraisal would be based on an analysis of the current replacement cost, including typical overhead and profit, and any necessary adjustments for depreciation.
This is a very common misconception. The sale price is presumed to be market value only if it was an “arms-length”, open market transaction, and you notified the Assessor’s office of the sale price by timely filing a “Preliminary Change of Ownership Report” or a “Change of Ownership Statement”. If these two conditions are not met and the market evidence supports a different indication of fair market value, your base year value will be set at market value, based on our appraisal. If both of these conditions are met, we would only set your base year value at something other than the sale price if a preponderance of evidence indicates the property would have sold for at least 5% more or 5% less than the actual sale price in an open market transaction.