(Editor’s note: Today, April 6, Palisades Resident Jeremy Padawar met with L.A. County Assessor Jeffrey Prang, Assistant Assessor Scott Thornberry and Chief Deputy George Renkei.)
Land in Pacific Palisades in 2027 will revert to pre-fire assessment.
By JEREMY PADAWAR
LAND:
Land in 2027 will revert to pre-fire assessment OR actual fair market value assessment if that is lower than pre-fire assessment. The 35% across the board land assessment reduction will no longer be in effect.
According to Prang and team, there is no other Assessor in the state of California who has ever reassessed value to a lower-level post fire. This was a unique situation where there was a land value decrease across the board to bring relief to property owners.
Relief was attributed as a percentage of the Prop-13 value. The treatment for total burn lots was 35% reduction of the land and 100% of the improvement.
MISFORTUNE/CALAMITY RELIEF:
There’s another component called the Fair Market Value. For 2027, the assessor team will look at sales and other transactions to assess new land value.
The Assessor will look to clear evidence in terms of land value including neighboring lot post-fire sales and lots in the area recent / post-fire sales.
IF the actual land market value is less than pre-fire assessment, then you will receive their actual fair market value assessment.
For homes last transacted a decade or more ago, such as mine, means I will be paying roughly pre-fire value… as fair market value for my land will very likely be higher than my pre-fire Prop-13 lot value.
For homes that recently transacted prior to fire, those people most likely will get Fair Market Value which will be less than pre-fire land value.
If one receives a 2027 land assessment and one disagrees with it, there will be a variety of recourses to get fair value where it should be. (Independent Assessment Appeal / Board of Supervisors).
But, 2027 will be the year that land reverts to actual assessed Fair Market Value (FMV) or pre-fire if actual FMV is higher… which is only likely for land that hasn’t transacted in some time.
STRUCTURE:
Every January 1, improvements will be reassessed. There is nothing that can be done from the LA County Assessor’s end to change that.
Any relief on structure would need to come from Sacramento or even constitutional in nature requiring a statewide ballot.
LAND + STRUCTURE:
The reversion to pre-fire value will occur post construction after one receives a Certificate of Occupancy from City of LA. That’s when the Assessor establishes that property has been fully restored, and this is assuming you’re within the 110% rebuild.
ASSESSOR PRANG:
I believe Jeffrey Prang and the assessor team to be earnest. Prang has limited discretion and exercised as much as he can to help residents.
The LA Assessor’s Office is one piece of a nuanced and complicated tax system. Multiple offices own specific parts of the system. Outcomes are bound by constitution and state statute.
Prang is not a policy maker. He suggested to Sacramento that they provide a 2-year tax holiday. Sacramento replied that there’s no remedy like that available. Revenue is not a factor in how legislators make decisions.
If Fair Market Value is lower than Pre-Fire assessed value for land, the Assessor’s office will adjust to Fair Market Value.
My Opinion on 2027 Property Tax Impact:
L.A. Mayor Karen Bass and Governor Gavin Newsom should be working together to minimize ANY property tax paid on a lot or home that’s unlivable. It’s unthinkable to me that this hasn’t been something on the front burner in a situation of THEIR own making.
Assuming we get no help at the Mayor or Governor level, property tax for LAND VALUE is going to increase PARTICULARLY for older homes that haven’t transacted recently – where FMV is HIGHER than pre-fire land tax assessment.
Additionally, it is unthinkable that those rebuilding must pay as a percentage of their rebuild / improvement on January 1 each year.
In a situation like this, paying tax as you rebuild a home you can’t live in is simply wrong. Prang can’t change this fact. It IS something that could be run up the flagpole by our Mayor, to the Governor and then to a vote. Now we all know what’s up in 2027 as far as property taxes – land, improvements and finished homes.
To read more from Padawar click here.
I think that what you meant to convey is that in 2027 the assessed value of a lot will be the lesser of a) the prefire lot assessment or b) the post fire market value
in Excel spreadsheet terms this can be written =min(prefire lot assessment, postfire market value)
You state this correctly in two sentences (1 and 2, below) and then in another sentence (3) you write something a bit odd
Either sentences 1 and 2 are correct, and 3 is incorrect, so 90272 residents have nothing to be concerned about
If sentence 3 is correct, and sentences 1 and 2 are incorrect, then lot market values are about the drop a lot
I like the tenor of this comment: “L.A. Mayor Karen Bass and Governor Gavin Newsom should be working together to minimize ANY property tax paid on a lot or home that’s unlivable. It’s unthinkable to me that this hasn’t been something on the front burner in a situation of THEIR own making.”
The behavior of Bass and Newsom is “unthinkable” if you think that they are public servants serving residents of 90272, the public
The behavior of Bass and Newsom is not “unthinkable” if the residents of 90272 are simply voting livestock to be milked for all they are worth
Prior to the fire. 90272 was a bubble community largely unaffected by the social revolution occurring across California and Los Angeles
Now as a supplicant to the state and the city (waiting Godot-like for the waiver of plan check and permit fees, action on Measure ULA, sales taxes, etc.) many in 90272 seem puzzled by the rules and regulations of the welfare oriented society that surrounds 90272
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1)
“Land in 2027 will revert to pre-fire assessment OR actual fair market value assessment if that is lower than pre-fire assessment. The 35% across the board land assessment reduction will no longer be in effect”.
2)
“For homes last transacted a decade or more ago, I believe (Jeremy Padawer) that you will be paying roughly pre-fire value… as fair market value for your land will very likely be higher than your pre-fire Prop-13 lot value.”
3)
“Assuming we get no help at the Mayor or Governor level, property tax for LAND VALUE is going to increase PARTICULARLY for older homes that haven’t transacted recently – where FMV is HIGHER than pre-fire land tax assessment. ”