I live in Santa Clara County. I bought a few properties through trustee sales this year, but it appears that the tax basis for these properties have not been re-assessed to reflect my purchase. Does anyone know what the rules are for establishing property tax basis after buying properties at trustee sales? Does a trustee sale trigger a property tax re-assessment?
In “regular” sales and short-sales, the initial property tax basis is set to the sales/purchase price. What is the property tax basis for a trustee sale?
County assessors usually ignore a Trustee Deed sale because they do not consider the purchase value a true market value (just their opinion). However, if your purchase value is higher than a really old assessed value, they will send out a supplemental bill for the higher value.
To request re-assessment you can file a Proposition 8 re-valuation request with the County Assessor, supported by the condition of the property and comparable sales. They are swamped with these requests now, but eventually it will be changed.
If you rehab the property and sell, they usually will establish the new market value for the property at that sale value and then send out the supplemental bill (if it is finally processed after your subsequent sale) for your period of ownership.