Many people have lost their steady income this past year. That alone can lead to numerous issues for normal day expenses. It can also lead to a bigger problem when it comes to paying a property tax California. These tax payments are currently coming due and many people are wondering if their California property tax assessment will change due to the current circumstances. While the California property tax bills affect every homeowner, there is also a business property tax California that business owners need to pay. While the hope was these bills would be lower, that hasn’t been the case in the state of California.
California Property Values Impacted by Covid-19 Issues
While mortgage rates have fallen to historic lows, the same is not true for California property values. Everyone who has not lost their job is taking advantage of the low mortgage rates to purchase new homes. This extra attention to low mortgage rates can actually cause property values to rise, because people are willing to pay more for a property.
Housing sales finished strong at the end of 2020. And the median house price hit a new record. This is slightly surprising, because the number of homes available for sale remained low. The number of houses on the market though sold quickly and for more than the asking price.
The trend we saw at the end of 2020 is going to continue for at least the beginning of 2021.
The 2021 Housing Forecast in California
1. The Housing Prices Will Continue to Climb and Housing Values will Soar
The prices of houses are continuing to grow, despite the continuation of Covid-19. Those prices are going to continue to rise, thanks to the low number of houses for sale. Zillow is currently predicting that sale prices of homes in California will continue to rise another 5% between now and August of this year. The only places where the prices of homes have been dropping are in those places that were affected by the wildfires.
2. Low Mortgage Rates Will Help the Affordability of Those Higher Valued Homes
Low interest rates will make it easier for some people to afford those higher valued homes. But people who have lost their jobs in the past year will still not have the ability to secure a mortgage, even if they manage to find a reasonably priced home.
3. Housing Sales Will Increase
Despite the higher home prices, people are looking for a change. Therefore, they will take advantage of the new interest rates with mortgages and make a move to a new home. This will allow housing sales to continue to increase for at least the first quarter or two in 2021.
4. Move from Urban to Suburban Markets
Many people will be looking to move from the city to the suburbs after this long year. Instead of staying cooped up in apartments and condos, people want to be able to walk out into their backyard in a house in the suburbs.
Utilize Proposition 19 if Possible
Since the real estate market in California is currently quite robust, there is very little chance that your California property tax assessment will go down. The only people who will see a difference in their property taxes are those who are old enough to take advantage of the newly implemented Proposition 19.
Part of this new law takes effect on April 1, 2021. Homeowners who are age fifty-five or older can transfer the value of their current primary residence over to a new primary residence. This new residence no longer needs to be smaller than the old one. It can even be a new construction. The transfer of the California property tax assessment value can be completed within two years of the sale of the original primary residence.
It is best to do the transfer as quickly as possible though if you are eligible for this benefit. If you wait two years, you will need to add the excess fair market value of the new primary residence to the assessed value of the old primary residence. The total will be the new California property tax assessment you will be required to pay.
This transfer of assessed value can also be done by those who are disabled or are a victim of a natural disaster or wildfire. Any eligible homeowner can take advantage of this transfer as many as three times.
Avoid Penalties on Your California Property Tax Bill
Everyone who has been affected by Covid-19 can avoid penalties on their California property tax bill. All you need to do is fill out a form to have the penalty fee cancelled. The forms are available online and are only available for specific payment dates.
You must include the full payment of your property taxes at the time you are making the penalty fee cancellation request. There is no guarantee you will get the penalty fee waived, but this year, many people have been successful.
It is best to include supporting documents with your form. Including as much information as possible is the best way to get this fee waived. A few supporting document examples include:
- Employer notification of employment release due to Covid-19
- Employer notification of business closing or reduced hours dur to Covid-19
- Document showing owner is unable to conduct business due to Covid-19
- Hospital release form indicating admission date
This last year has been rough for so many people, but not for everyone. The California property values have not decreased like many people thought they would. That means your California property tax assessment is going to be the same or even higher than in previous years. And there is very little you can do to get out of paying your property tax California.