Tax And Land Value: Noteworthy Info Before Buying

Before you commit to buying a parcel of property, there are some considerations to be aware of regarding tax land value.

Land tax value assessed annually – The taxing authority (i.e., the county tax assessor) assesses the value of the property annually and mails notice of tax assessment to the taxpayer.
Tax based on fair market value (FMV) – Tax on land and property is based on the FMV. The higher the value of the property, the higher the amount of the tax.
Know your state’s tax calculation – It’s important to know whether property in your state’s taxing jurisdiction is calculated at a particular percentage, not varying with actual use, a fixed rate. In California, for example, Proposition 13 in 1978 limited tax collection on land tax value to 1 percent of assessed value, plus funds necessary for voter-approved bond indebtedness or supplemental tax bills for firefighting, lighting, weed and pest control, etc.
Annual tax bills – Your state may permit annual increased adjusted for inflation of a certain percentage. California limits these annual increases to 2 percent.
Change of ownership triggers new assessment – Tax land value is reassessed upon change of ownership. The new assessed value is based on the fair market value of the property.