Gain in Property Tax Roll Best in 10 Years
The Orange County tax assessor, in a report that will be welcomed by school districts and other government agencies heavily dependent on property tax revenue, said Thursday that the value added to this year’s tax roll by new construction projects and the resale of existing real estate was the highest in a decade.
The report said that home and business resales along with new building added $4.29 billion to the county’s $178-billion property tax rolls between Jan. 1, when values are set by law, and the start of October.
“This means that we are seeing more new development and more changes of ownership than we have in several years,” said Richard W. Swanson, quality assurance manager for the assessor’s office. “This is a good indicator that the [economy] is beginning to roll.”
The increases revealed in the so-called “supplemental roll” come three months after the assessor reported a healthy 3% increase, to $178 billion, in the total dollar value of residential and business properties on the county’s tax rolls.
Swanson said the jump reflects a new construction boom taking place in South County and a countywide acceleration in the sale of existing homes. Under restrictions imposed by Proposition 13, a property’s assessed value cannot be upwardly revised to reflect its real market value until it has been sold or significantly upgraded.
In August, the average price of resale homes was nearly 9% higher than the year before at $220,000, according to DataQuick Information Services. Overall, the volume of home sales in August was the highest since October 1989.
The higher number of homes changing hands at higher prices is fueling the increases reflected in the newly released supplemental roll.
Because higher assessed values automatically translate into higher property taxes, the situation is expected to benefit local cities, school districts and special districts, which receive a share of property tax revenue to pay for services and operations.
It remains unclear how much of an increase each agency could receive and whether some will benefit more than others.
In a letter to county supervisors, Assessor Bradley L. Jacobs said the upswing represents “substantial new and more revenues available than [the county] has experienced in the past three years.”
The situation is a big change from the early 1990s, when a weak local economy and a sagging real estate market prompted thousands of residents to seek reduced property tax assessments.
With values declining, several city redevelopment agencies dependent on increases in property tax revenue for funding scaled back projects and delayed some revitalization programs.
