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Health & Fitness

Property Taxes and Prop. 13: It's That Time Again

Tax time - This is not one of our favorite times of year. While homeownership is generally a positive experience, it is painfully apparent it comes with a price – a high price.

Tax time: this is not one of our favorite times of year. While homeownership is generally a positive experience, it is painfully apparent it comes with a price – a high price. Aside from year-round home maintenance, insurance and loan payments, those twice-yearly property tax bills can take a real hit on our discretionary income. (Property taxes are paid in arrears).

Here's a bit of history on our property taxes here in Marin and California.

Prior to 1912, the state derived 70 percent of revenue from property taxes. Now the state's principal revenue sources are personal income taxes, sales and use taxes, bank and corporate taxes and a series of excise taxes. The Board of Equalization(BOE) administers sales and use taxes and excise taxes, while the Franchise Tax Board administers the personal income and bank and corporation tax.

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Today, it is California’s counties, cities, schools and special districts that depend on the property tax as a primary source of revenue. 

On June 6, 1978, California voters overwhelmingly approved Proposition 13, a property tax limitation initiative. This amendment was the taxpayer’s response to dramatic increases in property taxes. Revenue from property taxes have dropped due to the major drop in property values, thus causing a fiscal crisis for some of our basic services. Property taxes are only raised upon a change in ownership or completion of new construction. Plus, Prop. 13 generally limits annual increases to no more than 2 percent. That means that similar properties next door to one another can have substantially different assessed values depending on when the property last changed hands. This has been challenged, but not overturned.

Find out what's happening in Mill Valleywith free, real-time updates from Patch.

Right now, one can appeal their property tax rate by applying for a change with the County Tax Assessor’s Office.  Also, if you are 65 or older, you may be exempt from school taxes that appear on your tax bill.

Don’t forget your Homeowner’s Exemption of $7,000 reduction of taxable value on an owner occupied home. If you bought recently, be sure you do not miss this exemption! You need to make a one-time filing with the county assessor.

The Mill Valley real estate market has its bright spots - some multiple offers – but for the most part, many homes are sitting on the market.  Some are overpriced for this market, some are mainstream enough and need to wait for just the right buyer and others may be testing the market. Rumor has it, (heard it on the news) there may be yet another spate of foreclosed properties flooding the market soon. That means that prices will stay flat and may continue to go down. Last week's spring break for local schools also has produced a lull in the market.

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