All property tax values in California increase from 0-2% every year, this percentage trend is from on the Consumer Price Index which gauges inflation. Generally, California taxpayers pay about 1.25% of their assessed value in actual property taxes per year. For example, if you acquired your home for $100,000, your base value would be $100,000. Since you pay about 1.25% of the assessed value, your property tax bill the first year would be about $1,250. The property tax bill for the first year would be pro-rated for the part of the year you owned the house and/or you would get credit in escrow for the amount the previous owner owed.

In California that base value stays the same unless there is a re-assessable event, the only variation is that it trends no more than two percent every year. So the second year you own the property the trend would max out at a $2,000 increase based on the 2% limit. Your assessed value would increase from $100,000 to $102,000 which means your property taxes would increase from $1,250 the first year to $1,275 the second year. The 2% compounds over time, so the amount that it increases also increases over time because the value does compound. There are years where the percentage is less than 2%, again that number is based on the Consumer Price Index.

When specific exemptions are applied to your assessed value, it will not increase annually for inflation. If a house has a Proposition 8 decline in value (temporary decline in value based on market decline) the value will not increase. The assessed value is evaluated annually by the Office of the Assessor to determine if it should be modified. Similarly, if there is a Disaster Relief exemption also called Misfortune and Calamity applied to a home the assessed value will not increase, the Assessor will visit the home each year to see the home repairs and will adjust the value or not based on what has been repaired. In addition, exemptions for the disabled and/or veterans do not trend either. Normally, your base value will increase up to 2% annually unless an exemption that applies.

Normally most houses in California trend every year and as a result of this each property owner has a trend in property taxes every year. Over a period of 30 years your assessed value will double. A great example of this is my parents’ property which they bought in 1979 for $80,500 and the current assessed value in 2009 for that property based on the $80,500 30 years ago is $138,783 so in 30 years they went from paying $1,006 per year to $1,734 per year. If you begin with a property tax base of $500,000 in 30 years your assessed value increases to $887,922 meaning you will start off paying $6,250 per year and in 30 years be paying $11,099 per year!

Understanding how drop that property tax base you will save thousands in the long run! If you bought your residence for $500,000 and today your home is only worth $300,000 you will save thousands! With a $300,000 tax base you will pay $3,750 per year and in 30 years your assessed value will be about $532,753 so you will pay about $6,659 per year in property taxes. Don’t settle for the temporary reduction in value the Assessor is offering right now called Proposition 8 Decline in Value. So PERMANENTLY lowering your property tax base by $200,000 will save you EVERY year you own your home! The California Little Black Book shows you how!

About the Author: Valerie Faltas, Property Tax Expert has been involved in all facets of real estate for over ten years including assessments, appraisals, estates and trusts, investing and much more. She is a Certified Property Tax Appraiser, Licensed Residential Appraiser and a member of the International Association of Assessment Officers. As a real estate investor and advisor she is well versed in all aspects of real estate. To contact Valerie Faltas go to her website: www.propertytaxlittleblackbook.com.

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In addition to your basic property taxes, if your property tax bill seems unusually high especially during this housing crisis you may have a Special and/or Direct Assessment on your home. This will vary based on the area your residence is located, there may be costs necessary to pay off any voter-approved general obligation bonds or other indebtedness, special assessments, or direct levies. For example, a Direct Assessment may be applied to your home if voters decide to establish a sewage system in a neighborhood that is older where most of the residences use septic tanks. The direct assessment is used to cover the cost of this improvement to the neighborhood.

Most of the time, a direct assessment is added on to your property tax bill over several years so the taxpayers are not inundated by the special assessment to pay for the improvement. Special and Direct Assessments have a reason they are added on to your basic assessment such as an improvement to a city and when that new improvement has been paid for the special or direct assessment is complete and will no longer be on your property tax bill. Generally, this type of debt is usually fraction of a percent increase in your existing property tax rate.

Direct levies are applied on the property tax bill by the county tax collector on behalf of the local levying agency or district, not on behalf of the assessor, auditor-controller, and/or the county tax collector divisions. Remember, that Special and Direct Assessments are based on voter approved indebtedness so if there is any dispute it has nothing to do with the Assessor. For more information, or if you disagree with a special assessment against your property, you must contact the levying district directly. Usually this information is on your property tax bill.

It is not wise to refuse to pay a property tax bill that contains the special or direct assessment, even when the direct levy amount is under review. Keep in mind that even if you disagree with your property tax bill it is always wiser to pay the bill and get refunded later than to have an outstanding tax bill on your home. The processes to remove a delinquent property tax bill and all of the fines, require many signatures and forms within the Assessor’s Office and Tax Collector’s Office and is pretty complicated. So keep it simple, pay your property tax bill, any exception to this would be an extreme situation.

About the Author: Valerie Faltas, Property Tax Expert has been involved in all facets of real estate for over ten years including assessments, appraisals, estates and trusts, investing and much more. She is a Certified Property Tax Appraiser, Licensed Residential Appraiser and a member of the International Association of Assessment Officers. As a real estate investor and advisor she is well versed in all aspects of real estate. To contact Valerie Faltas go to her website: www.propertytaxlittleblackbook.com.

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Prop 8 is a supplement or exemption to Prop 13 which still applies today to all taxpayers in California. Prop 13 was put into place in 1978 to control the amount of property taxes paid by property owners. Prop 8 Reduction is an exemption to Prop 13 which says that your assessed value should not be higher than market value for any given year. So, when the market is going down like it is today and has dipped below your current assessed value, you are entitled to some relief.

This appears to be good information yet, it is only a SHORT TERM answer. The Prop 8 Exemption is usually something you have to file for. The way Prop 8 Decline in Value works is like this: your date for the current fiscal year is January 1st for your property taxes. So, the comparable sales for your property for this exemption, need to have closed within the first quarter of the given year; January 1 to March 31 based on the language of the law. So to get a Prop 8 Decline in Value reduction for 2009, the comparable sales need to have closed between January 1st, 2009 and March 31, 2009. To qualify for this reduction in value there has to be comparable sales of houses similar to yours within the first quarter of the designated year that are lower than your assessed value for that year.

This is a major problem for several reasons: one of the biggest is that the first quarter of the year has the fewest comparables because those sales started during the holiday season which is the slowest time for real estate, no matter what type of market we’re in. Real estate sales take 30-60 days to close, so most of the sales that close within the first quarter of the year opened escrow during the holiday season. The comparable sales to choose from are much less than later on. When the decline really starts to show during the second and third quarters of the year you can’t use those sales for a Prop 8 reduction.

This is not the best solution because it is only a SHORT TERM reduction in value, so when the market starts to climb back up, and it always does, your old assessed value gets restored to what it would have been had you never gotten the reduction. Many property tax specialists appear in declining markets claiming to be able to save you on property taxes. They send mailers that look like they are from the Assessor which they are not and sadly, taxpayers pay good money to have their taxes “lowered” only to have their tax bills revert to higher rates once the market recovers. Truthfully you never pay the Assessor for any service or review of your value – you pay for that with your property taxes already!

Let me illustrate the way Prop 8 Reduction works on an average home in California. I purchased a residence in 2005, at the hight of the market, for $500,000, at a 2% trend my current assessed value for 2008 is $530,604. My market value as of the beginning of 2008 is near $430,000 and since I am a knowledgeable homeowner I apply for a Prop 8 Exemption to get a break. So, for 2008 I have a break, Im paying on a value that is $100,000 below my trended base value and saving near $1,250! The real estate market goes down and based on the Assessors review, the Prop 8 Reduction value is given for 2009 also. So for 2009 I am paying based on the $430,000 which is even better this year since my trended base in 2009 would have been $541,216 and so I am saving close to $1,390! Fantastic!

The real estate market turns around, and the market values are rising and for 2010 my market value is higher than $500,000, so the Assessor’s Office changes my Prop 8 Exemption value to $500,000 which is below my 2010 trended base value of $552,040. Definitly, not as nice as having $430,000 as my value. Yet, I am still saving money and this year my Prop 8 Reduction value is $52,000 lower than my trended base value I am saving $650 a year in property taxes. Its now 2011 the real estate market is rising again and now my market value is near $600,000 and the assessor restores my value to the trended base, which now is $563,080. So, I’m paying $7,038 in taxes. If I still had that $430,000 property tax base

California Property Tax Law offers a way to PERMANENTLY reduce your property taxes with today’s declining real estate market, based on Prop 13 and essentially avoiding Prop 8 Decline in Value and all of its limitations. In addition, find out how to avoid reassessment when you inherit property and how to use the exemptions allowed by Prop 13 to your maximum advantage.

About the Author: Valerie Faltas, Property Tax Expert has been involved in all facets of real estate for over ten years including assessments, appraisals, estates and trusts, investing and much more. She is a Certified Property Tax Appraiser, Licensed Residential Appraiser and a member of the International Association of Assessment Officers. As a real estate investor and advisor she is well versed in all aspects of real estate. To contact Valerie Faltas go to her website: www.propertytaxlittleblackbook.com

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Beach homes in Costa Rica are the most preferred choice of investment for real estate in Costa Rica. Costa Rica is an beautiful country located in the Central American region. Owning a property in Costa Rica is like owning a piece of paradise. This country has breathtakingly beautiful beaches and a rich coast line.

Costa Rica is one of the many countries in the Central American region. This country comprises of a group of charming and enchanting islands nestled in the Pacific Ocean and Caribbean Sea. Beach homes in Costa Rica are worth investing in because Costa Rica has a vast coastline and the beaches are intoxicating and splendid.

Beach homes in Costa Rica are not much preferred among the “ticos” (the natives of Costa Rica).They ticos prefer houses away from the beach in the heart of the city because the beach homes are too expensive for most of the ticos to purchase. It is the “gringos” (foreigners) who carry great fascination for the beach front properties fueled by the fact that they can afford the prices quoted for these properties. These properties come with the great combination of luxury and comfort.

Beach homes in Costa Rica encompassing a large land area contain indescribably beautiful flora and fauna. The beach homes are well equipped with all amenities that give a totally different meaning to the words “comfort” and “luxury”. The houses are sprawling with many bedrooms, bathrooms, living area, a large kitchen and also swimming pools.

There are many reasons for why an American would like to buy beach homes in Costa Rica. Firstly, Americans like the idea of their houses being big and spacious and the beach homes are indeed large and spacious. Many beach front homes are occupied by Americans. This is another reason that the other Americans looking to buy real estate in Costa Rica opt for beach front homes because they can see a lot of their countrymen around which prevents them from feeling alienated in a foreign country.

For Americans who are surfing lovers, investing in beach homes in Costa Rica will prove to be beneficial in multiple ways. Costa Rica is considered as a surfer’s paradise. The waves of the sea in Costa Rica are strong and large which are most suitable for surfing. The joy of taming the waves in this country with its nature relatively untouched is indescribable.

The waves of the ocean in this part of the world are big and strong and are accompanied by a warm and moderate climate both of which are the most suitable conditions for surfing. There are other activities also like fishing, jogging, horse riding, football, beach volleyball, sand sculpting and even the normal swimming that people can indulge in.

Though beach homes provide the investor with sheer pleasure of owning a piece of paradise on earth, there are also a couple of drawbacks that come with the territory. One main drawback is that the “ticos” are aware of the weakness of the “gringos” to buy beach houses. Hence, the natives quote very high prices for the breach front properties. You need to be a good negotiator and work out on getting the best price.

Another aspect of concern is the safety and security. Not all beach homes are safe and secure. Some of them are in areas which are well known for criminal activities. One has to be careful while investing in such properties. They will have to ensure that all the security arrangements are in place to safeguard their priceless investment.

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As a trader, the market action these days are amazingly good. Buy when it goes down, sell when it goes high. Rinse and repeat. As an investor though, the moves must be driving you nuts. The Dow has been stuck in this range for about a month now, and it’s hard to say whether the bulls or the bears will win this tug of war.

On the bull’s side, it’s still the same arguments that recovery is well under way. That it’s never as bad as everyone thought it will be and there are tremendous amounts of cash on the sidelines waiting to be invested.

The bears argue that while the downturn is slowing its pace and shows signs of stabilizing, we are far from a recovery that the rally suggests. They believe that the foreclosure wave is still yet to come and when the fed runs out of gas with all the stimulus, the economy, and thus the stock market, will tumble.

Articles for the Weekend

• For more evidence on the bear case, note that the Case Shiller index fell at a record pace.
• Of course, if you are an oblivious investor, you can just ignore the noise. However, you still need to be honest with your expectations of the long term market returns.
• Or if you can get a 49,250% return, you probably don’t need to worry about how the market does as a whole.
• Now that GMAC’s banking division changed name, Bank Savings Review did a review of the new offerings, Ally Bank.
• Lastly, whatever you do, you should always save money on your wedding. Here’s how.

Carnival

• Carnival of Cash Flow
• Money Hacks Carnival
• OneMint Carnival
• Wealth, Money, Life Carnival
• Personal Finance News Carnival

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Related Articles at Investing School:

• Weekend Investment Reading – Happy Holidays Edition
• WIR – What a Week in the Stock Market
• Weekend Investing Reading (WIR)
• Weekend Investment Reading – Wow
• Weekend Investment Reading – Ignoring the Volatility

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