Assessed value on a house bought at an auction


#1

I’m thinking about buying a home at an auction sale in Contra Costa County and curious to know what the county will use as the value to assess the property tax. Is it at the auction price or some market value the county arbitrarily assigns to the house? The assessed value will be a factor for me as property tax is a major expense on my budget.


#2

Hi Kelly,
The county tax assessor will reassess the property whenever there is a full value transfer. Typically the new assessed value will be the transfer value unless the transfer was for less than market value. When you record a grant deed or trustees deed you would fill out a Preliminary Change of Ownership form that tells the county assessor the nature of this transfer.


#3

In my experience, the county assessor will reassess your property for a value a bit higher than the purchase price specified on your trustee’s deed. County assessors seem to hold the opinion that you don’t pay “market value” at auction.

If you flip the property, the county will reassess the property once again and issue you a supplemental prorated for the time period you held the property. Most of the time, this second reassessment will be for the actual sales price.


#4

Be sure to file the preliminary change of ownership report. (PCOR) Take lots of photos to document the actual condition of the property. Keep track of the costs of repairs including the receipts, If it is a flip, this is probably not worth the trouble, if you are going to keep it, then be prepared to file an appeal if you do agree with the assesor notice regarding new base year valuation,


#5

In my County the supplemental tax bill (which is trigerred by the Trustee Deed change in ownership from the auction purchase) doesn’t quite make it out of their system until after my subsequent flip sale to a new buyer. They seem to always use the Flip sale value as the value for the supplemental bill for my period of ownership.

I just haven’t had the time to fight it, but it is something that can be argued. Example - I buy a house that is in terrible condition at $100,000 and have to put $50,000 into the property to bring it to the future value of $200,000. One could argue that it was only worth $100,000 until that future date when the market value became $250,000.

For budgeting purposes, you need to calculate taxes at the future fixed up value of the home. Every County is approaching the supplemental value calculation differently.