Proposition 13 Changed the Rules for Payment of Property Taxes.

Proposition 13 Changed the Rules for Payment of Property Taxes.

Provdided By: Los Angeles Adverse Possession Lawyer

Fifty years ago, residential property was assessed by lot number and location, using the legal description of the property as set forth in the deed.

In June 1978, California voters adopted Proposition 13. (Cal. Const., art. XIII A, §§ 1-6.) “Unless otherwise provided, in California all real estate is assessed at fair market value for the purposes of taxation. (Cal. Const., art. XIII, § 1 et seq.) One of the most crucial exceptions is carved out by Article XIII A which sets a constitutional limit on the maximum amount of tax that may be levied on real property. That limit on all residential and commercial property is 1 percent of the 1975 base year value which may be enhanced to reflect an inflation rate of no more than 2 percent per year. (Art. XIII A, § 2, subd. (b).) An exception to this rule is supplied in section 2, subdivision (a), which allows the limit to be raised in case a change in ownership has occurred subsequent to the 1975 assessment. In the latter instance, the real property is reappraised at fair market value as of the date of change and the rate of 1 percent is calculated according to the newly established value of the property. (Art. XIII A, § 1, subd. (a), § 2, subd. (a).)” ®. H. Macy & Co. v. Contra Costa County (1990) 226 Cal.App.3d 352, 356.) Thus, Proposition 13 created a “balance between the goals of tax limits (the 1 percent cap), tax certainty (limits on increases in assessed valuation), and stable revenue to local governments (reassessment upon change of ownership).” (Northwest Financial, Inc. v. State Bd. of Equalization (1991) 229 Cal.App.3d 198, 206, fn. 6.)

In addition to changing the tax amount, Prop 13 changed tax procedure. The evidence will be that the procedure used by the County Assessor’s Office for property transferred after the passage of Proposition 13: (1) the county recorder’s office sends a copy of the deed transferring ownership of the property to the assessor; (2) a clerk in the assessor’s office reviews the deed and determines if the seller and the legal description of the property on the deed match the assessee and the legal description on the assessment roll; (3) the clerk enters the name of the new property owner for the future assessment roll; (4) a copy of the deed is forwarded to an appraiser in the assessor’s office; and (5) the appraiser notes the purchase price of the property, and “based on his or her knowledge of property values generally for the type being sold, ‘appraises’ the property by enrolling a new value on the assessment roll for the ensuring year that will then become the ‘base year value’ upon which subsequent annual increases under Prop 13 will be computed.” Since tax assessment after Proposition 13 is based on the purchase price of the property not the value of the lot, Client has been paying taxes on the DISPUTED PROPERTY since 1978.

Client have paid all taxes due on the Client PROPERTY since 1978. The only issue is whether the DISPUTED PROPERTY was assessed to the Client or HERYFORD. Because the apparent property line is 30 some feet from the HERYFORD house and the HERYFORD fence, for thirty years it has appeared to all that the Client PROPERTY included the DISPUTED PROPERTY.

The natural inference is that the assessor did not base his assessment on the true boundary, but valued the land and improvements visibly possessed by the claimant.” (Raab v. Casper (1975) 51 Cal.App.3d 866, 124 Cal.Rptr. 590.)

The California Supreme Court approved this presumption in Gilardi v. Hallam (1981) 30 Cal.3d 317 [636 P.2d 588, 593, 178 Cal.Rptr. 624.1) Since there was no other evidence before the tax assessor, it must have assumed that the DISPUTED PROPERTY was part of the Client’s property. It naturally follows that the assessor included the DISPUTED PROPERTY and the improvements upon it in his assessment of taxes upon the Client PROPERTY. Therefore, the taxes on the DISPUTED PROPERTY were assessed to the Client and the Client paid the taxes on the DISPUTED PROPERTY.

HERYFORD is expected to argue that because DISPUTED PROPERTY as shown on the taxes rolls is part of her lot, she “must” have paid taxes on the DISPUTED PROPERTY when she paid the HERYFORD PROPERTY tax bill. But the tax bill is a piece of paper that does not include property lines, it is merely a notification of the amount of taxes due not a legal description of the property.

“Appellant contends that the description on the tax assessment rolls is controlling, and that as a matter of law the respondent must have paid taxes only on the land described on the assessment rolls. This court has held, however, that the fact that land was not assessed by its description is not controlling under section 335 of the Code of Civil Procedure.

(Ward Redwood Company v. Fortain, (1940), 16 Cal.2d 34, 44, 104 P.2d 813.)

The purpose of the description on the tax assessment rolls is to notify interested parties of the taxes due on the property, and appellant cannot complain of any mistake in the description unless he was misled thereby. [cites omitted]”

(Sorensen v. Costa (1948) 32 Cal.2d 453, 465 [196 P.2d 900].) The tax bill does not determine who paid taxes on the DISPUTED PROPERTY, only how much money a person owes.


For sixty years, the DISPUTED PROPERTY has been visually part of the Client’s PROPERTY and everyone assumed and acted as though it was. When the tax assessor visited the properties, he would have seen two houses separated by a steep hillside and 30 some feet with a fence located at the top of the hill on the HERYFORD PROPERTY. There is no evidence that when the tax assessor assessed the Client’ property, he was informed that the DISPUTED PROPERTY was not on Client’ property. The absence of the DISPUTED PROPERTY would make the Client property worth less; therefore, if the tax assessor had been aware of the true property line and the encroachments, he would have reduced the assessment on the Client PROPERTY. If the tax assessor had been aware that the HERYFORD PROPERTY was 20 feet wider than it appeared, then he would have increased the assessment on the HERYFORD PROPERTY. There is no evidence that the tax assessor deducted any amounts from the Client’ tax bill for parts of their house not being on their property or that he increased the assessment on the HERYFORD PROPERTY. The presumption must be that the tax assessor did the natural thing and presumed that the Client’ house and improvements were on the Client’ land and that the Client’s property had the legal setbacks. If so, the tax on the DISPUTED PROPERTY was assessed to Client and his predecessors, and he paid taxes on all that the assessor assumed was part of the Client’ property, including the DISPUTED PROPERTY.

Discovery has revealed that HERYFORD cannot rebut the presumption that the DISPUTED PROPERTY taxes were paid by the Client. As HERYFORD cannot rebut the presumption that the assessor made a mistake and included the DISPUTED PROPERTY in the assessment of the Client property, and the Client paid all the taxes assessed to them, the Client have established that they have paid the taxes on the DISPUTED PROPERTY.

In Sorensen v. Costa (1948) 32 C.2d 453, 196 P.2d 900, in which the adverse possession resulted from a mistaken description in deeds, the tax assessment rolls and tax receipts also contained a mistaken description. Adverse possession was gained because the claimant and his predecessors intended to pay, and did pay, taxes actually assessed against the land occupied. (32 C.2d 465.) Landowners, who claimed title by adverse possession to part of lot on which their improvements encroached, established payment of taxes by evidence that certificate of assessment showed adjoining lot to be unimproved, whereas value of encroaching improvements was assessed to claimants’ lot and paid by them.

(See Winchell v. Lambert (1956) 146 C.A.2d 575, 582, 304 P.2d 149.)

Tags: Los Angeles, Proposition 13, Rules for Payment of Property Taxes

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