LA County Tax Collector and Los Angeles Property Tax
Los Angeles County is the largest county in California by area and population. Due to its size and diversity, the methods for calculating property tax in LA County can be rather confusing. If you own or plan to own property in this county, it’s important to understand how to calculate and pay LA property tax.
5 Things to Know About LA County Property Tax
- How is Los Angeles Property Tax Calculated
- LA County Property Tax Rates
- Los Angeles County Property Tax Deadlines and Due Dates
- How to Pay LA Property Tax
- Ways to Lower Los Angeles Property Tax Liability
Los Angeles County is the largest county in California, covering 4,751 square miles. LA County has a population of over 10 million people and is comprised of 88 different cities — with the city of Los Angeles being the largest. With over 2.57 million parcels and assessments, LA County’s total assessment property tax roll value is $1.51 trillion dollars. The county generates $15 billion of property tax revenue each year, with almost half of this amount going towards funding school districts.
Buying and selling real estate can lead to capital gains tax and other tax consequences, depending on how long you’ve held the property. With a better understanding of LA County property taxes, you’ll be able to implement an effective tax strategy that minimizes the liability of your real estate investments.
1. How is Los Angeles Property Tax Calculated
Property tax in LA County is comprised of multiple factors. First, the general property tax levy is applied across the state of California. Next, voter-approved debt may apply, depending on where the property is located. If the property is in a school district or special district, an additional property tax will be applied. In compliance with Proposition 13, the general tax levy of 1%, or $1 per $100, is applied as property tax by the state.
The value of a property cannot increase more than 2 percent from the prior year unless there is a change in ownership or improvements made to the property. When there is a change in ownership, a parcel of property is reassessed by the assessor’s office to update the taxable value to the purchase price or fair market value. Voter-approved indebtedness and special districts rates change annually. Additional amounts may be added to your tax bill as direct assessments from various taxing authorities with jurisdiction where the property is located. Real estate owners will usually receive their tax bills in October, but it is the owner’s responsibility to find out how much is owed each year and pay this tax. Hefty fines and penalties apply to property owners who do not pay their taxes on time.
Actual property tax amounts are determined when county clerks, registrars, and city agencies provide deeds, building permits, and other documents to the County Assessor, who assesses the value of real property. They look for changes in ownership, improvements to the property, and exclusions or exemptions. Once the value has been determined the County Auditor or Controller applies the appropriate tax rate to determine property tax due for every parcel. The Los Angeles County Treasurer and LA County Tax Collector will then mail out property tax bills and collect payments for the county treasury. Once the money is received, the Auditor-Controller allocates the fund to over 900 taxing authorities in the county, such as schools, cities, and special districts. Property tax is an ad valorem tax based on the assessed value of real estate or other property.
2. LA County Property Tax Rates
Property tax rates in California begin with a general tax levy of 1%. Cities and local municipalities can levy additional tax on property. For example, the city of Los Angeles in LA County usually applies a property tax rate of .021297 to .029754 on top of the 1% general levy. Over the last five years, the city of Los Angeles property tax rate has decreased from .029754 for 2013-2014 to .021345 for 2017-2018. The tax rate for a resident in Los Angeles would be at least 1.021345 in 2017-2018 — not including school or special district tax rates.
School districts taxes comprise the majority of a property tax, second only to the general tax levy. These rates can range depending on the school district and the given year. The LA County Office of the Assessor has recorded a gradual decrease of school district property tax from .190980 in 2013-2014 to .168182 for 2017-2018. The Metropolitan Water District services many counties, including Los Angeles County. Their property tax rates have not changed since 2012 which is .003500.
In total, residents of Los Angeles City in LA County may expect to see property tax rates around 1.193027 for 2017 to 2018. Previously, the property tax rate was 1.191849 in 2016-2017, 1.191994 in 2015-2016, 1.218651 in 2014-2015, and 1.224234 in 2013-2014. As you can see, the property tax rate has gradually decreased according to the Los Angeles County Office of the Assessor. The actual property tax rate for any given property in LA County may be higher or lower than these recorded amounts due to additional taxing authorities. You can look up your real estate parcel on the LA County tax website to see what the actual property tax rate will be for the current year. You can also collaborate with a professional tax attorney for the most up-to-date information.
Los Angeles Property Tax Deadlines and Due Dates
In LA County, property taxes are paid over two installments. First, the Assessor’s office determines property value accounting for any changes. Then, the Auditor-Controller’s office applies tax rates to each parcel of real estate, depending on location and taxing jurisdictions. After this, the LA County Treasurer and Los Angeles County Tax Collector office will mail out real estate tax bills and collects payments. These tax bills are usually sent out in October, but it is the property owner’s responsibility to obtain and pay the amounts due by the deadlines. The first installment is due by November 1st and is considered late after December 10th. The second installment is due February 1st and delinquent after April 10th. Delinquent bills can accrue a 10% penalty on the first installment and a 10% penalty on top of a $10 charge for the second installment.
When property changes hands and the previous owner owes property taxes, the amount due is considered unsecured because there is no longer any real estate for the taxing authorities to place a lien on in case of nonpayment. Unsecured property tax is also assessed on personal property and has harsher penalties because there is either no property, such as when real estate changes owners, or moveable property, such as boats. A new owner may then receive a supplemental tax bill that takes into account the property’s new — and usually higher — taxable value.
It is important to know that you do have some options if you owe property tax that seems unmanageable. For example, LA County has installment plan options for residential properties with less than five years in default and commercial property with less than three years in default. There is also an installment plan for “escaped” assessments, such as when a sale occurs, and property tax was recalculated for the previous owner. You may also be able to have the tax assessment changed through the appeals board. The best thing to do is contact an experienced tax professional who can determine your options and advise you on the best strategy for your unique tax situation.
4. How to Pay LA Property Tax
There are many ways to pay your property taxes in LA County. You can pay online using eCHECK, which utilizes the Automated Clearing House (ACH) network to debit your bank account. Your bank must be ACH enabled and if you have debt filters on your account you can authorize Los Angeles County to debit your account. Mytaxcollector.com is the official online payment website for the Los Angeles County Tax Collector. The current Company Identification Number for LA County Tax Collector is 0000079161. You can also pay the Los Angeles Tax Collector with a credit card or debit card. If you prefer to use USPS you can mail a check or money order to the Los Angeles County Tax Collector:
LOS ANGELES COUNTY TAX COLLECTOR
P.O. BOX 54018
LOS ANGELES, CA 90054-0018
Be sure to include the LA County Tax Assessor Identification Number from your tax bill as well as the Los Angeles County property tax bill payment stub. Be aware that there are strict postmarked requirements to ensure your payment is received on time. Other payment options include paying by telephone — or even in person, at some locations. You will need your parcel assessment identification number, especially if you plan to reach out to the assessment appeals board. Collecting and accounting for all property tax revenue is the responsibility of the Los Angeles County Tax Collector. If you qualify, you may be able postpone payment of your property taxes by directly contacting the county tax office.
5. Ways to Lower Los Angeles Property Tax Liability
There are many ways to lower your tax liability when it comes to property taxes in California. One way is to take advantage of Propositions 58 or 193, which allows the transfer of a tax basis on a parcel of real estate. This means that when a piece of property is passed from a parent to a child or from a grandparent to a grandchild, such as through an estate transaction or trust, you may apply to keep the same tax basis to avoid an increase of the taxable value to the current fair market value. This can help heirs save money on a primary residence by keeping a lower tax rate, or — if there was a loss in value — reducing the tax to the lower current market value. Parents and grandparents can also transfer up to $1 million in real estate that is not a primary residence. Of course, laws and regulations change periodically, so it’s best to check with a professional tax attorney to see if you qualify for these exclusions.
There are many exemptions available that can reduce the property tax amounts if the real estate owner applies for them at the right time. A homeowner’s exemption can reduce the property value by $7,000 and thus lower the tax bill. There is also the decline-in-value exemption, thanks to Proposition 8, which allows a temporary reduction in assessed value if current market rates dip below the original or assessed base year. A senior citizen over 55 who is moving from a primary dwelling to a property with an equal or lower value than the previous home can keep their original property tax basis if they apply within three years of the purchase.
Those who are severely and permanently disabled may qualify for an exclusion that allows them to transfer to participating counties if the new residence is less than or equal in value to the current residence. This must be done within three years of purchase and allows the owner to keep the same assessed value as the previous residence, instead of the current market value of the new property. There are also exclusions for disaster relief due to misfortune or calamity, which allows the temporary reduction of property value from damage caused by fire, flood, or earthquake. This exclusion is only for property with more than $10,000 in damage. To receive this exclusion, the owner must file the appropriate paperwork within three years of purchase.
Those who are considering green energy solutions will be pleased to know that California also offers exclusions for the value of solar energy systems. And some may qualify for the veterans’ exemption which allows those with assets less than $5,000 if single and $10,000 if married to remove up to $4,000 from the assessed property value. Finally, disabled veterans can claim an exemption, depending on the level of their disability. A surviving spouse of a disabled veteran may also qualify for this exemption, but it must be filed by February 15th of a given fiscal year to obtain the full exemption. For more information on how to limit your end of year tax liabilities check out our ultimate guide to tax planning.
LA County Property Tax
LA County is the largest county in California and raises over $15 billion in annual property tax revenue. Property tax calculations depend on a variety of factors, including the specific location of the real estate parcel. There is a general tax levy of 1% applied across California on the after-exemption value of the property. Depending on the location of the property, additional taxing authorities, such as voter-approved indebtedness, school districts, and special districts assess an additional tax rate on top of the general levy. For example, the property tax rate in Los Angeles City was roughly 1.193027 in 2017-2018. This tax rate is applied to the property value as an ad valorem tax and is due in two installments. These installments are due by November 1st and February 1st. You can pay your property tax bill online, by mail, telephone, or even in person.
You may qualify for exemptions and exclusions, which will lower your taxable amount if you apply in time. Those who have rental investment properties may be interested in ways to protect rental property income. Because of the complexity of property tax, it’s a good idea to consult with a professional tax lawyer who can analyze your unique tax situation and plot the best course when it comes to protecting your assets and minimizing your taxes. Reach out to the professionals at Anderson Advisors today for assistance managing your estate and property taxes.
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