When buying a home anywhere, you’ll quickly learn that there are a lot of other factors in the amount you are actually going to pay. Sure, there’s that large list price that you think you can cover with a loan, but there’s also the interest rate which fluctuates based on the economy and the confidence the banks have in you paying them back over 15 to 30 years; and there’s the taxes on the home itself, which can add hundreds of thousands of dollars to the total amount you pay, and hundreds if not thousands of dollars per month to your mortgage payment on the home itself. The amount of taxes you pay varies from state to state and city to city, and that rate differs greatly in Los Angeles from a number of other major American cities. Here are the important things to know about property tax rates when buying a home in Los Angeles as opposed to any other metropolis in the United States.
HOW PROPERTY TAXES WORK IN LOS ANGELES
There are three steps for how the tax amount on a home in Los Angeles is determined. First, an assessor who works for Los Angeles County comes in and appraises the value of your property under specific state laws. This is effected by what other homes in the area or neighborhood have been appraised at or recently sold for, the condition of the house and the size of the home and property based upon square footage. Any improvements that have been made on the property are also added to the overall value to be taxed by the assessor. The property is then given a value and placed on a list called the Assessment Roll.
The assessment roll is then turned over to auditor controller of Los Angeles county who applies the general tax rate to the overall value of the property. In Los Angeles County, this is 1 percent of the total assessed value of the home or property. This amount along with the address and owner of the property is then added to a list known as the extended assessment roll.
This extended assessment roll list is then turned over to the county treasurer and tax collector who will send out the amount of tax that is owed on a specific property based on the final amount the assessor and auditor controller have come up with. That becomes the property tax bill you will pay on the home or property you purchase in Los Angeles.
OTHER TAXES ON PROPERTY IN LOS ANGELES
Other charges will also appear on your annual tax bill beyond the 1 percent levied by the county. These include a number of things like voter approved taxes for the unified school district, community colleges, a water tax and a city of Los Angeles tax. There are also direct assessment taxes for services provided by the city of Los Angeles like trauma and emergency services, LA City Park taxes, flood control taxes and LA storm water tax, among others. The total amount of these extra taxes that are charged just for living in the city of Los Angeles in many cases equates to around .25 percent of most annual taxes, in most cases.
HOW DOES LOS ANGELES COMPARE FOR PROPERTY TAXES?
If you were to look at the state of California as a whole, property taxes are about mid-range, as California comes in 17th among states in America for highest property taxes. The state laws effect Los Angeles to a certain extent, but the county still taxes more a lot, ultimately making it one of the places with the highest tax rates in all of the Golden State. In fact, Los Angeles has the eighth highest tax rate in the entire nation, due to an incredibly high sales tax rate and incredibly high assumed home values.
However, when you compare it to other major cities of it’s size, Los Angeles has one of the more reasonable big city property tax rates. As mentioned, it’s current property tax rate is 1 percent, which is one of the lowest of big cities in the nation. Compare this to Baltimore, Maryland who has incredibly high property taxes or Newark, New Jersey for example, where homeowners are absolutely hammered by property tax rates, to make up for the fact that they don’t pay income tax at the state or local level.
In other words, owning a home in Los Angeles will be expensive and you will have to pay your fair share of taxes. However, when you compare it to other major American cities of it’s size, the City of Angels is actually a deal when it comes to property tax rates. Now all you have to do is find that perfect affordable house to live your own version of the California Dream.
2 Point Highlight
“The amount of taxes you pay varies from state to state and city to city, and that rate differs greatly in Los Angeles from a number of other major American cities.”
“However, when you compare it to other major cities of it’s size, Los Angeles has one of the more reasonable big city property tax rates.”
