Off Topic Property tax question if you have time

[jcsct5]

Soc,

The state is California, so this is related to proposition 13.

My husband and I signed a contract to purchase a home in June of 2003. The contract gave the builder of the home until June of 2004 to complete the home. If after June of 2004 the home wasn't completed then we (my husband and I) would heave to option to walk and get our deposit back. It wasn't completed until June 2005. We decided to wait for the home to be built and still purchased the home.  The purchase price of the home was 640K, the contract price of the home.

The County sent their supplemental tax assessment to use that revalues the home upon change in ownership. They are assessing the property at 1 mil instead of the purchase price of the home.  They say that it is assessed at the full market value at the time of closing. The lenders appraisal of the home at the time of closing was 985K.

I have read about prop 13 and its intention but can't come to a clear understanding of it. Some things I have read say it is valued at the time of sale. Which I interpret to mean June 2003.  Others say when the property changes hands or is newly contructed. Both of which also apply.

Any insite would be helpful but my specific questions are:

1) Is my interpretation of the sale date way off, is the sale date the date of closing or the date contract was signed, or something completely different?

2) If they are correct and the property is assessed at the 1 mil. Then would we have a case against the builder, because if they had completed the home within the timeframe of the contract our tax base would have been the purchase price of the home? (I say this based on neighbors who signed around the time we did and their homes were completed timely and their basis is purchase price.)

Off topic again:

3) A few years back you said you would reveal the purpose of your volunteering your time to this board in September 2005, and I think since then it was pushed to November 2005. Do you have any intentions of still revealing such information? Or did I miss it.

I realize this isn't your area of expertise, but form what I can summize you are likely a resident of California and therfore I hope that you may know a little bit about this subject.

Thank you for your time and I hope you have a wonderful Thanksgiving.
 

[socrateaser]

>1) Is my interpretation of the sale date way off, is the sale
>date the date of closing or the date contract was signed, or
>something completely different?

"Cal. Rev. Code 71.  The assessor shall determine the new base year value for the portion of any taxable real property which has been newly
constructed.  The base year value of the remainder of the property
assessed, which did not undergo new construction, shall not be
changed.  New construction in progress on the lien date shall be
appraised at its full value on such date and each lien date
thereafter until the date of completion, at which time the entire
portion of property which is newly constructed shall be reappraised
at its full value."

The last sentence above, indicates that the property assessment is fixed upon the date of completion of new construction, and not the date of sale. Therefore, the assessor's position is correct.

>2) If they are correct and the property is assessed at the 1
>mil. Then would we have a case against the builder, because if
>they had completed the home within the timeframe of the
>contract our tax base would have been the purchase price of
>the home? (I say this based on neighbors who signed around the
>time we did and their homes were completed timely and their
>basis is purchase price.)

You might have a case that but for the contractor's failure to complete according to the original contract terms, your property assessment would have been lower. But, you need to prove that the late finish is actually a breach of the contract terms, and I can't tell that without reading the contract, which I suspect is probably a mile long.

On the brighter side, you've made 350K. Think how you would feel if the market had tanked and the property was only worth 100K now?

>Off topic again:
>
>3) A few years back you said you would reveal the purpose of
>your volunteering your time to this board in September 2005,
>and I think since then it was pushed to November 2005. Do you
>have any intentions of still revealing such information? Or
>did I miss it.

Stay tuned to this channel for the further information.

>I realize this isn't your area of expertise, but form what I
>can summize you are likely a resident of California and
>therfore I hope that you may know a little bit about this
>subject.

It's a lemon entry, Watson!