Thursday, October 5, 2017

Where do your Property tax expenses go?

There are many taxes associated with a property tax bill, but generally it is 1% of the assessed value of a property. The state of California takes in $43 billion a year in tax revenue as of 2010-2011. Other charges like Mello-Roos, and assessments take in another $12 billion. All of that revenue remains in the county the taxes were collected, which in turn goes to 4000 local governments including School districts (K-14), and county government agencies. Owner occupied residential properties make up 39% of all property tax revenue with 34% coming from investment and vacation home property. While commercial property makes up 28% of the total. Some properties pay no tax like government owned property, religious institutions, charities and hospitals. More revenue in property taxes increases the state budget. If the tax year is high than education budgets are reduced at the state level. If the property tax revenue is low than the state needs to make up the difference. The 2008 real estate crisis hit the state hard since there was many foreclosures causing tax revenue to go down, as well as, property values. Generally according to a recent report property tax revenue is steady, since even in recessions the property tax revenue remains. People tend to pay their mortgage and taxes making them the last to go in personal financial crises. You can learn more about this from the Legislative Analysis office in Sacramento