Do property taxes change according to the last sold price in Los Angeles?
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[{"id": "fry5ezq", "text": "Yes, it\u2019s true and yes it will affect the NNNs.", "replies": [{"id": "frzfwbg", "text": "This is true in most cases, but it depends on the lease. I've seen NNN leases that give protection to the tenants against reassessments due to change of ownership.", "replies": [], "depth": 2}], "depth": 1}, {"id": "frytkge", "text": "Yes, California only reassesses property tax valuations after a property is sold (for both commercial and residential). The annual taxes paid by a 15+ year owner *are not* what the new owner can expect to pay after a sale.", "replies": [{"id": "frzcqgl", "text": "coupled with the cap of 1% annual tax increases a year, it really sucks for people who try to move. A lot of people cant afford to move within the state if they state in one spot too long and it severally decreases the amount of transactions that occur in the state imo", "replies": [{"id": "frzio78", "text": "Interesting that you see the cap as a negative. Those people who can't move have benefitted from the cap for their entire ownership", "replies": [{"id": "frzjspp", "text": "Yeah i know it\u2019s a positive for those owners and it sounds good in theory so governments can\u2019t just jack up prices but it is a negative for the economy as a whole\n\nIt\u2019s not really fair that the owners aren\u2019t essentially paying their fair share of taxes just because they haven\u2019t moved. It limits residential transactions which reduces jobs and capital flowing in the economy, makes it much tougher for people to move into the area due to the artificially lower supply of houses on the market (which again, benefits the home owners as this drives prices up). The government has to make up taxes by having an increased income tax. Idk I\u2019m just rambling on now but essentially it hurts non homeowners a lot more since every year this goes on, it becomes harder and harder for non homeowners to afford a home", "replies": [{"id": "fs019xz", "text": "Do you have any data to back this up? I know a similar situation happens regarding rent control as it ultimately drives up rent prices.\n\nBut with property taxes, I feel like the situation is a bit different bc taxes are dictated by the government and I think most people feel like the government doesn't necessarily have the best budgeting and isn't the most fiscally responsible (vs. rent control and rent prices are more or less dictated by market balance and supply/demand, without government intervention).\n\nSo yes, a cap in property taxes could theoretically hurt homeowners by driving up prices for everyone else. But the alternative is no cap whatsoever and property tax prices can skyrocket (look at property tax rates in TX) bc the government constantly needs more funds. Then the opposite problem occurs -- home prices have downward pressure, folks are more hesitant to purchase, and rent prices still need to remain high to offset the high property tax costs.", "replies": [{"id": "fs04kkw", "text": "Without spending much time on google:\n\nhttps://www.latimes.com/politics/la-pol-ca-california-property-taxes-elites-201808-htmlstory.html\n\nhttps://www.sfchronicle.com/politics/article/Proposition-13-is-no-longer-off-limits-in-13492400.php?utm_campaign=twitter-premium&amp;utm_source=CaliforniaNationalParty&amp;utm_medium=social\n\nHere is back and forth on the opposite view point (on why it's good), but didn't convince me that it's good for most people, just for senior citizens https://www.reddit.com/r/changemyview/comments/9fuzxt/cmv_prop_13_california_should_be_abolished/", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "frzgbem", "text": "They're also reassessed for new construction activity. This includes the obvious new buildings/additions, but it also includes things like adding a bathroom, rehabilitating a property, converting a property to a different use, etc. In these cases, only the additional value gained by the new construction is added on top of the existing assessment.", "replies": [], "depth": 2}], "depth": 1}, {"id": "frzb9lu", "text": "Yes, but with the caveat that if the county assessors office feels that the property is worth more than you bought it (i.e. you got it for a good deal), it may be assessed higher than the selling price. This happened to me recently. I bought a property in the valley for $610k but the assessor said it's worth at least $900k &amp; they're probably right; the seller was desperate and I had offered him 21 days to close as he needed cash flow for another business of his.", "replies": [{"id": "frzcl6q", "text": "I wonder how they flag these transactions to check it out", "replies": [{"id": "frzf0ts", "text": "Software; arms-length vs non, assumed appreciation rates and comps.", "replies": [{"id": "frzf549", "text": "wow great answer. There is no software out there that has accurate valuations of cre based on public information", "replies": [{"id": "frzf9fg", "text": "I added to the comment; it doesn't need to be accurate, it just needs to flag it.  I'm sure they have a 10 or 15% tolerance to values.  We're talking about tax assessments values, not actual values.  Whatever they come up with is what the millage will use.", "replies": [{"id": "frzfe40", "text": "I guess it's only flagging things that have a really off base valuation", "replies": [{"id": "frzfqyy", "text": "We like to complain about how taxes are spent, but my experiences with assessment offices have been annoyingly pleasant and rational.", "replies": [], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "frzfmpg", "text": "CA Assessor here. At least in my county, every transfer of commercial property is appraised for tax purposes (i.e. not a 100+ page report) by a person, not a computer. Depending on complexity of the property, some amount of research is done. Requests for the historical income are sometimes made. We'll look at the CoStar reports, the historical sales of the subject, permit history, asking rates. When you research and appraise every single sale of property in a given assignment area and/or type, you really know if a sales price makes sense pretty quickly.", "replies": [{"id": "frziv6c", "text": "Gotcha thanks for the reply", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fs0czwz", "text": "Take the taxes out of the expenses and add the tax rate to the cap rate. \n\nSo add back, say, 50k to net income and if the effective tax rate is 1.5%, add that to your cap rate. \n\n(Noi + current prop tax) div by (cap rate + effective prop tax rate) = value", "replies": [], "depth": 1}]