
Negative Property Tax Adjustment Coming?
Proposition 13 says that your property tax cannot go up more than 2% per year no matter how high inflation is. Since 1978 inflation has usually been over 2% so that incremental property tax increase has become routine. In both 1999 and 2004, the Consumer Price Index grew less than 2%, so the property assessments and taxes went up by the actual amount for those years, 1.85% and 1.86% respectively.
But what has never happened is for inflation to be less than 0%. Never until now. While the year for the CPI calculation runs to October, right now this year is running negative. If in these economic times prices decline over the entire year, then the official CPI index will be negative for the first time in the history of Proposition 13.
So each of us property owners should see a small yet real decline in property taxes. Right? Not so fast– the taxacrats are working on legal arguments to claim that a negative CPI change does not require a property tax change. Since this has never happened before and has not been addressed by the Legislature or the Board of Equalization, any decision will provoke some real controversy.
I believe… Read More