principles of california real estate
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Lesson 5:Lesson 5:
Public Restrictions Public Restrictions
on Landon Land
Principles of California Real Estate
Introduction
Private property ownership is affected by public restrictions on land (land use controls):
Introduction
Private property ownership is affected by public restrictions on land (land use controls):zoning ordinancesbuilding codessubdivision regulationsenvironmental laws
Introduction
Private property ownership is affected by public restrictions on land (land use controls):zoning ordinancesbuilding codessubdivision regulationsenvironmental laws
The government’s powers of eminent domain and taxation also affect property.
Land Use ControlsPolice power
Police power: State’s constitutional power to adopt laws necessary for protection of public’s health, safety, morals, and general welfare.
Land Use ControlsPolice power
Police power: State’s constitutional power to adopt laws necessary for protection of public’s health, safety, morals, and general welfare. Allows government to place restrictions
on owner’s use of private property.
Land Use ControlsPolice power
Police power: State’s constitutional power to adopt laws necessary for protection of public’s health, safety, morals, and general welfare. Allows government to place restrictions
on owner’s use of private property.State delegates its police power to local
governments.
Land Use ControlsConstitutional limitations
To be constitutional, land use regulation must:
1. have a reasonable relationship to public health, safety, morals, general welfare
Land Use ControlsConstitutional limitations
To be constitutional, land use regulation must:
1. have a reasonable relationship to public health, safety, morals, general welfare
2. not discriminate between similarly situated property owners
Land Use ControlsConstitutional limitations
To be constitutional, land use regulation must:
1. have a reasonable relationship to public health, safety, morals, general welfare
2. not discriminate between similarly situated property owners
3. not reduce property value so much that regulation amounts to confiscation
Land Use ControlsConstitutional limitations
To be constitutional, land use regulation must:
1. have a reasonable relationship to public health, safety, morals, general welfare
2. not discriminate between similarly situated property owners
3. not reduce property value so much that regulation amounts to confiscation
4. prevent harm to the public that prohibited use of property would cause
Land Use ControlsComprehensive planning
City or county must prepare general plan for development (also called comprehensive plan or master plan).
Land Use ControlsComprehensive planning
City or county must prepare general plan for development (also called comprehensive plan or master plan).
The plan should:set long-range development goals
Land Use ControlsComprehensive planning
City or county must prepare general plan for development (also called comprehensive plan or master plan).
The plan should:set long-range development goals ensure land is developed in orderly fashion
Land Use ControlsComprehensive planning
City or county must prepare general plan for development (also called comprehensive plan or master plan).
The plan should:set long-range development goals ensure land is developed in orderly fashionaddress population density, building
intensity, housing, traffic patterns, transportation systems, noise control, etc.
General plan is implemented by city and county governments through zoning ordinances and other land use regulations.
Land Use ControlsComprehensive planning
Land Use Controls Types of land use controls
Different types of land use control laws: zoningbuilding codessubdivision regulationsenvironmental laws
Land Use ControlsZoning
Zoning ordinance: Divides community into land use zones with only certain types of uses allowed in each zone.
Land Use ControlsZoning
Zoning ordinance: Divides community into land use zones with only certain types of uses allowed in each zone.
Areas zoned for incompatible uses may be separated by undeveloped areas (buffers).
Zoning ordinances cannot: be applied retroactively
Land Use ControlsZoning
Zoning ordinances cannot: be applied retroactively discriminate against particular parcel of
property
Land Use ControlsZoning
Zoning ordinances cannot: be applied retroactively discriminate against particular parcel of
property create patently unfair situation
Land Use ControlsZoning
Zoning ordinances cannot: be applied retroactively discriminate against particular parcel of
property create patently unfair situation
Zoning decisions typically can be appealed to city or county government, and then appealed to court of law.
Land Use ControlsZoning
ZoningUse categories
Early zoning laws usually had only a few broad land use categories: residential, commercial, industrial, and agricultural.
ZoningUse categories
Early zoning laws usually had only a few broad land use categories: residential, commercial, industrial, and agricultural.
Modern zoning laws typically have numerous subcategories.
Examples of possible residential zones: R 1: allows detached single-family houses R 2: also permits row houses and duplexes R 3: also permits apartments and
condominiums R 4: permits any type of housing, including
mobile homes
ZoningUse categories
Examples of possible residential zones: R 1: allows detached single-family houses R 2: also permits row houses and duplexes R 3: also permits apartments and
condominiums R 4: permits any type of housing, including
mobile homesAgricultural zones are typically designated
with letter “A,” and industrial zones are typically designated with letter “M.”
ZoningUse categories
Zoning ordinances may: set minimum lot sizes
ZoningLand use limits
Zoning ordinances may: set minimum lot sizes limit building height
ZoningLand use limits
Zoning ordinances may: set minimum lot sizes limit building height require minimum distances from property
lines for buildings (setback and sideyard rules)
ZoningLand use limits
Zoning ordinances may: set minimum lot sizes limit building height require minimum distances from property
lines for buildings (setback and sideyard rules)
limit how much of lot can be covered by a building
ZoningLand use limits
ZoningZoning exceptions
Zoning ordinances must be applied in same manner to all similarly situated property owners.
ZoningZoning exceptions
Zoning ordinances must be applied in same manner to all similarly situated property owners.
Special provisions for exceptions to zoning:nonconforming usesvariancesconditional uses
Zoning ExceptionsNonconforming uses
Nonconforming use: Existing use that becomes a violation when new zoning is imposed.
Zoning ExceptionsNonconforming uses
Nonconforming use: Existing use that becomes a violation when new zoning is imposed.May be because of buildings, lot size, or
use.
Zoning ExceptionsNonconforming uses
Nonconforming use: Existing use that becomes a violation when new zoning is imposed.May be because of buildings, lot size, or
use.
Example: Grocery store opens in developing area with no zoning. Town council later zones area for residential use.
To require nonconforming uses to be immediately brought into compliance with new zoning laws would:cause too much financial hardship for
owners
Zoning ExceptionsNonconforming uses
To require nonconforming uses to be immediately brought into compliance with new zoning laws would:cause too much financial hardship for
ownersdiscourage land development (most
property owners expect to be able to continue their present use)
Zoning ExceptionsNonconforming uses
Nonconforming uses are usually allowed to continue, but with restrictions. They cannot be:expandedrebuilt after destructionresumed after abandonment
Zoning ExceptionsNonconforming uses
Nonconforming uses are usually allowed to continue, but with restrictions. They cannot be:expandedrebuilt after destructionresumed after abandonment
The property can be sold, but the new owner is subject to the same restrictions.
Zoning ExceptionsNonconforming uses
Nonconforming uses are usually allowed to continue, but with restrictions. They cannot be:expandedrebuilt after destructionresumed after abandonment
The property can be sold, but the new owner is subject to the same restrictions.
Zoning laws may establish reasonable time limits
to phase out nonconforming uses.
Zoning ExceptionsNonconforming uses
Zoning ExceptionsVariances
Variance: Special authorization to build structure or use property in way that is generally prohibited (often referred to as an exception).
Zoning ExceptionsVariances
Variance: Special authorization to build structure or use property in way that is generally prohibited (often referred to as an exception).Used where enforcement of zoning
would result in substantial harm to owner without providing any real public benefit.
Owner can apply to the local zoning authority for a variance.
Zoning ExceptionsVariances
Owner can apply to the local zoning authority for a variance.Must show severe practical difficulties or
undue hardship.
Zoning ExceptionsVariances
Owner can apply to the local zoning authority for a variance.Must show severe practical difficulties or
undue hardship.Variance will not be granted just to make
property more profitable.
Zoning ExceptionsVariances
Owner can apply to the local zoning authority for a variance.Must show severe practical difficulties or
undue hardship.Variance will not be granted just to make
property more profitable.Variance usually authorizes only minor
deviation.
Zoning ExceptionsVariances
Owner can apply to the local zoning authority for a variance.Must show severe practical difficulties or
undue hardship.Variance will not be granted just to make
property more profitable.Variance usually authorizes only minor
deviation. California prohibits use variances.
Zoning ExceptionsVariances
Zoning ExceptionsConditional uses
Conditional use: Zoning authority may issue special permits for certain uses inconsistent with a neighborhood’s overall zoning, but necessary or beneficial to community.
Zoning ExceptionsConditional uses
Conditional use: Zoning authority may issue special permits for certain uses inconsistent with a neighborhood’s overall zoning, but necessary or beneficial to community.
Examples: schools, hospitals, churches, and cemeteries.
Zoning ExceptionsRezoning
Property owner may apply for amendment of zoning ordinance.
Zoning ExceptionsRezoning
Property owner may apply for amendment of zoning ordinance.
To get a rezone:owner must show change in
circumstances since adoption of original zoning ordinance
Zoning ExceptionsRezoning
Property owner may apply for amendment of zoning ordinance.
To get a rezone:owner must show change in
circumstances since adoption of original zoning ordinance
public hearing must be held and surrounding landowners notified
SummaryLand Use Controls
Police power General plan Zoning Nonconforming use Variance Conditional use Rezone
Land Use ControlsBuilding codes
Building codes:establish minimum standards for
construction
Land Use ControlsBuilding codes
Building codes:establish minimum standards for
constructionrequire builders to use particular
methods and materials
Land Use ControlsBuilding codes
Building codes:establish minimum standards for
constructionrequire builders to use particular
methods and materialsprotect public against dangers caused by
unsafe design, substandard materials, or poor workmanship
Building CodesPermits
Compliance with building codes is enforced through the building permit system.
Building department can order removal of any improvements that do not conform to applicable building codes or that were made without a proper building permit.
Building CodesPermits
Compliance with building codes is enforced through the building permit system.
Building CodesConstruction inspections
Once building permit is issued and construction begins, inspector can stop work on project if it conflicts with plans or building codes.
Building CodesConstruction inspections
Once building permit is issued and construction begins, inspector can stop work on project if it conflicts with plans or building codes.
After construction is completed, finished building will be inspected and certificate of occupancy issued if every aspect of building complies with codes.
Building CodesOlder properties
When government imposes new, stricter standards, property owners may be required to bring old buildings up to code.
Land Use ControlsSubdivision regulations
Local governments also implement general plans by regulating new subdivision development.
Land Use ControlsSubdivision regulations
Local governments also implement general plans by regulating new subdivision development.
Developers must get subdivisions approved before selling individual lots.
Subdivision RegulationsTypes of subdivisions
Types of subdivisions (which are usually residential) include:Standard subdivision
Subdivision RegulationsTypes of subdivisions
Types of subdivisions (which are usually residential) include:Standard subdivisionCommon interest subdivisionPlanned development
Subdivision RegulationsTypes of subdivisions
Types of subdivisions (which are usually residential) include:Standard subdivisionCommon interest subdivisionPlanned developmentTimeshareUndivided interest subdivision
Subdivision Regulations
California has two state laws regulating subdivision of land:Subdivision Map Act: procedural law
establishing procedures developer must follow when subdividing land.
Subdivision Regulations
California has two state laws regulating subdivision of land:Subdivision Map Act: procedural law
establishing procedures developer must follow when subdividing land.
Subdivided Lands Act: consumer protection law requiring certain disclosures to consumers buying subdivided lots.
Subdivision RegulationsSubdivision Map Act
Gives local governments power to regulate subdivision creation.
Subdivision RegulationsSubdivision Map Act
Gives local governments power to regulate subdivision creation.Subdivider must show compliance with
general plan and availability of utilities.
Subdivision RegulationsSubdivision Map Act
Gives local governments power to regulate subdivision creation.Subdivider must show compliance with
general plan and availability of utilities.Applies to all subdivisions of land into
two or more parcels.
Subdivision RegulationsSubdivision Map Act
Gives local governments power to regulate subdivision creation.Subdivider must show compliance with
general plan and availability of utilities.Applies to all subdivisions of land into
two or more parcels.Doesn’t apply to property located outside
the state, even if sale takes place in California.
If subdivision contains five or more parcels, subdivider must file tentative map with planning agency that includes:legal description of propertyproposed lot boundaries
Subdivision RegulationsSubdivision Map Act
If subdivision contains five or more parcels, subdivider must file tentative map with planning agency that includes:legal description of propertyproposed lot boundarieslocation of utility easements and access roadsproposed street widths
Subdivision RegulationsSubdivision Map Act
If subdivision contains five or more parcels, subdivider must file tentative map with planning agency that includes:legal description of propertyproposed lot boundarieslocation of utility easements and access roadsproposed street widthssource of water supplyprovisions for control of flooding and geologic
hazards
Subdivision RegulationsSubdivision Map Act
Planning agency will consult with other government agencies and either:approve the mapreject it, oraccept it with certain changes
Subdivision RegulationsSubdivision Map Act
Planning agency will consult with other government agencies and either:approve the mapreject it, oraccept it with certain changes
Once tentative map is approved, subdivider has 24 months to file final map. No sale, lease, or contract for sale or lease of any subdivided property is valid until final map is filed.
Subdivision RegulationsSubdivision Map Act
Developer of subdivision with two to four lots, condominium, or cooperative may file a parcel map (less detailed) instead of a tentative subdivision map.
Subdivision RegulationsSubdivision Map Act
Subdivision RegulationsSubdivided Lands Law
Requires subdivision developers to make certain disclosures to prospective buyers.
Subdivision RegulationsSubdivided Lands Law
Requires subdivision developers to make certain disclosures to prospective buyers.Applies to most subdivisions with five or
more parcels.
Subdivision RegulationsSubdivided Lands Law
Requires subdivision developers to make certain disclosures to prospective buyers.Applies to most subdivisions with five or
more parcels.Act applies to any sale taking place in
California, even if property is located outside the state.
Subdivision Regulations Subdivided Lands Law
Final public report: Issued by Real Estate Commissioner after investigating the subdivision. Until it is issued, lots in the subdivision cannot be sold, leased, or financed.
Final public report will be denied if Commissioner finds:any evidence subdivision is unsuitable
for use proposed by subdivider
Subdivision Regulations Subdivided Lands Law
Final public report will be denied if Commissioner finds:any evidence subdivision is unsuitable
for use proposed by subdividerno assurance purchaser will get what he
or she pays for
Subdivision Regulations Subdivided Lands Law
To obtain final public report, subdivider must be able to show that:streets, curbs, and other improvements will be
completed
Subdivision Regulations Subdivided Lands Law
To obtain final public report, subdivider must be able to show that:streets, curbs, and other improvements will be
completed there will be adequate water and other utilities any deposit money will be secure
Subdivision Regulations Subdivided Lands Law
To obtain final public report, subdivider must be able to show that:streets, curbs, and other improvements will be
completed there will be adequate water and other utilities any deposit money will be secureall construction or blanket mortgage liens will
be lifted so purchasers will not take title subject to them
title will be conveyed to purchaser upon completion of transaction
Subdivision Regulations Subdivided Lands Law
The final public report includes, among other things: subdivision location and size subdivider’s name and project name legal interest to be acquired by purchaser procedure for handling purchase money
Subdivision Regulations Subdivided Lands Law
The final public report includes, among other things: subdivision location and size subdivider’s name and project name legal interest to be acquired by purchaser procedure for handling purchase money amount of any taxes and assessments private restrictions any unusual costs to the purchaser any unusual or potentially harmful financial
arrangements
Subdivision Regulations Subdivided Lands Law
Anyone who requests a public report must be given one.
Subdivision Regulations Subdivided Lands Law
Anyone who requests a public report must be given one. Each prospective purchaser must
receive report before entering into sales agreement
Subdivision Regulations Subdivided Lands Law
Anyone who requests a public report must be given one. Each prospective purchaser must
receive report before entering into sales agreement
Purchasers must sign receipt acknowledging they got report
Subdivision Regulations Subdivided Lands Law
Anyone who requests a public report must be given one. Each prospective purchaser must
receive report before entering into sales agreement
Purchasers must sign receipt acknowledging they got report
Subdivider must keep receipt for at least three years
Subdivision Regulations Subdivided Lands Law
Final report is valid for five years, unless there is a material change to subdivision: physical change to subdivision (such as
new lot lines)
Subdivision Regulations Subdivided Lands Law
Final report is valid for five years, unless there is a material change to subdivision: physical change to subdivision (such as
new lot lines)changes in method used to transfer or
finance lots
Subdivision Regulations Subdivided Lands Law
Final report is valid for five years, unless there is a material change to subdivision: physical change to subdivision (such as
new lot lines)changes in method used to transfer or
finance lotssale of five or more lots to one party
Subdivision Regulations Subdivided Lands Law
Final report is valid for five years, unless there is a material change to subdivision: physical change to subdivision (such as
new lot lines)changes in method used to transfer or
finance lotssale of five or more lots to one partyany new conditions affecting lot use or
value
Subdivision Regulations Subdivided Lands Law
Subdivision Regulations Subdivided Lands Law
Commissioner may issue preliminary report before issuing final report.
Subdivision Regulations Subdivided Lands Law
Commissioner may issue preliminary report before issuing final report.
A buyer may reserve lot in subdivision after receiving preliminary report, although buyer must have right to back out with full refund after receiving final report.
Subdivision Regulations Subdivided Lands Law
Commissioner may issue preliminary report before issuing final report.
A buyer may reserve lot in subdivision after receiving preliminary report, although buyer must have right to back out with full refund after receiving final report.
Preliminary reports expire after one year, but may be renewed.
Subdivision Regulations Subdivided Lands Law
If subdivider violates any provision of the Subdivided Lands Law, Commissioner may stop violation with a desist and refrain order.
Subdivision RegulationsInterstate Land Sales Full Disclosure Act
ILSFDA: Federal law requiring developers to register their projects and disclose information to buyers.
Subdivision RegulationsInterstate Land Sales Full Disclosure Act
ILSFDA: Federal law requiring developers to register their projects and disclose information to buyers.
Generally applies to subdivisions with 25 or more unimproved lots, if offered for sale in interstate commerce.
Summary Building Codes and
Subdivision Regulations Building codes Building permits Certificate of occupancy Subdivision Map Act Subdivided Lands Law ILSFDA
Land Use ControlsEnvironmental laws
Environmental laws: Laws intended to prevent pollution and protect the ecological balance.May be federal, state, or local.
Environmental LawsCERCLA
Comprehensive Environmental Response, Compensation, and Liability Act: Federal law concerning liability for environmental cleanup costs.
For property contaminated with hazardous waste, CERCLA may require current owner to pay for cleanup, even if contamination was caused by previous owner or tenant.
Environmental LawsCERCLA
Environmental LawsNEPA
National Environmental Policy Act: Law that requires environmental impact statement (EIS) prepared before federal agency undertakes any project with significant effect on environment.
Environmental LawsNEPA
National Environmental Policy Act: Law that requires environmental impact statement (EIS) prepared before federal agency undertakes any project with significant effect on environment.
Also applies to private uses or developments requiring federal agency approval.
Environmental impact statement examines a project’s impact on energy consumption, water facilities, sewage systems, drainage, and many other environmental, economic, and social factors.
Environmental LawsNEPA
Environmental LawsCEQA
California Environmental Quality Act: State law similar to NEPA—requires state or local agencies to prepare environmental impact report (EIR) for any project, private or public, with significant environmental impact.
Public hearing must be held for each EIR. Hearing must cover alternatives to proposed action, and may require developer to make changes in project to reduce impact.
Environmental LawsCEQA
Environmental LawsCalifornia Coastal Act
California Coastal Act: State law that created Coastal Commission, which researches ways to protect California coastline and controls coastal development.
Environmental LawsCalifornia Coastal Act
California Coastal Act: State law that created Coastal Commission, which researches ways to protect California coastline and controls coastal development.
Development in coastal zones must be
approved by Coastal Commission regional board.
Environmental LawsAlquist-Priolo Act
Alquist-Priolo Special Studies Zone Act: State law that requires application for new residential development or construction in certain areas to include geologic report.
Environmental LawsAlquist-Priolo Act
Alquist-Priolo Special Studies Zone Act: State law that requires application for new residential development or construction in certain areas to include geologic report.
Also requires agent/seller to disclose any known hazards from earthquake fault lines.
SummaryEnvironmental Laws
CERCLA NEPA CEQA California Coastal Act Alquist-Priolo Act
Public Restrictions on LandEminent domain
Eminent domain: Power of government to take private property for public use, upon payment of just compensation to the owner.
Public Restrictions on LandEminent domain
Eminent domain: Power of government to take private property for public use, upon payment of just compensation to the owner.
May be used to help implement general plan.
Normally, the government first offers to buy the property. If the owner refuses to sell, or demands too high a price, the government can file a condemnation lawsuit and force a sale at fair market value.
Public Restrictions on LandEminent domain
Public Restrictions on LandTaxation of real estate
General real estate taxes are taxes on ownership of real property.
Public Restrictions on LandTaxation of real estate
General real estate taxes are taxes on ownership of real property.Used to pay for government operating
costs and services.
Public Restrictions on LandTaxation of real estate
General real estate taxes are taxes on ownership of real property.Used to pay for government operating
costs and services.Determined based on the value of the
property.
Public Restrictions on LandTaxation of real estate
General real estate taxes are taxes on ownership of real property.Used to pay for government operating
costs and services.Determined based on the value of the
property.
Also called ad valorem taxes (ad valorem is Latin for “according to value”).
General Real Estate TaxesAssessment
Assessment: Valuation of property by county assessor’s office, to determine tax basis.
General Real Estate TaxesAssessment
Assessment: Valuation of property by county assessor’s office, to determine tax basis.Land and improvements are assessed
separately and then totaled, to calculate single tax rate for property.
General Real Estate TaxesAssessment
Assessment: Valuation of property by county assessor’s office, to determine tax basis.Land and improvements are assessed
separately and then totaled, to calculate single tax rate for property.
Owner can appeal assessment to county Board of Equalization.
Real property generally must be assessed at 100% of full cash value.
General Real Estate TaxesAssessment
Real property generally must be assessed at 100% of full cash value.
Full cash value is market value (most probable price property would sell for under normal market conditions).
General Real Estate TaxesAssessment
Real property generally must be assessed at 100% of full cash value.
Full cash value is market value (most probable price property would sell for under normal market conditions). Proposition 13 limits California property tax
rates to 1% of property’s full cash value.
General Real Estate TaxesAssessment
Real property generally must be assessed at 100% of full cash value.
Full cash value is market value (most probable price property would sell for under normal market conditions). Proposition 13 limits California property tax
rates to 1% of property’s full cash value. Property’s assessed value cannot increase
more than 2% per year.
General Real Estate TaxesAssessment
General Real Estate TaxesReassessment
If property is sold, new owner has 45 days to file change in ownership statement.
General Real Estate TaxesReassessment
If property is sold, new owner has 45 days to file change in ownership statement.
Unless transaction is exempt, property’s assessed value will be changed to reflect new price.
Exempt from reassessment: certain transfers between parents and
children or between spouses
General Real Estate TaxesReassessment
Exempt from reassessment: certain transfers between parents and
children or between spouses transfers where method of holding title
changes but ownership doesn’t change
General Real Estate TaxesReassessment
Exempt from reassessment: certain transfers between parents and
children or between spouses transfers where method of holding title
changes but ownership doesn’t change transactions where senior citizen (over age
55) or severely disabled owner sells home and replaces it with home of same or less value, in same county
General Real Estate TaxesReassessment
General Real Estate TaxesPayment
Property tax year runs from July 1 through June 30 of following calendar year.
General Real Estate TaxesPayment
Property tax year runs from July 1 through June 30 of following calendar year.
Taxes are levied annually, on or before September 1.
General Real Estate TaxesPayment
Property tax year runs from July 1 through June 30 of following calendar year.
Taxes are levied annually, on or before September 1.
Tax lien attaches on January 1 of year preceding
fiscal year for which taxes are levied (lien set for undetermined amount, because taxes have not yet been levied).
Tax bill mailed on or before November 1.
General Real Estate TaxesPayment
Tax bill mailed on or before November 1. Taxes are paid in two installments:
first is due November 1, with installment becoming delinquent on December 10
General Real Estate TaxesPayment
Tax bill mailed on or before November 1. Taxes are paid in two installments:
first is due November 1, with installment becoming delinquent on December 10
second is due February 1, with installment becoming delinquent on April 10
General Real Estate TaxesPayment
Tax bill mailed on or before November 1. Taxes are paid in two installments:
first is due November 1, with installment becoming delinquent on December 10
second is due February 1, with installment becoming delinquent on April 10
A 10% penalty is imposed on any delinquent payment.
General Real Estate TaxesPayment
General Real Estate TaxesDefault
Delinquent taxpayer must receive notice of impending default by June 30.
General Real Estate TaxesDefault
Delinquent taxpayer must receive notice of impending default by June 30.
If taxes not paid by June 30, property is considered ‘sold’ to state by operation of law. This begins a five-year redemption period.
During the redemption period, the delinquent taxpayer can:redeem the property by paying all back
taxes, interest, costs, and penalties
General Real Estate TaxesDefault
During the redemption period, the delinquent taxpayer can:redeem the property by paying all back
taxes, interest, costs, and penaltiesremain in possession of the property
General Real Estate TaxesDefault
During the redemption period, the delinquent taxpayer can:redeem the property by paying all back
taxes, interest, costs, and penaltiesremain in possession of the propertymake payments on the delinquency in
installments, if necessary
General Real Estate TaxesDefault
If delinquency not paid within five years, property is deeded to state.
General Real Estate TaxesDefault
If delinquency not paid within five years, property is deeded to state.
Tax collector sells property at tax sale, applies sale proceeds to debt, and returns any surplus to former owner and any parties with interest in property.
General Real Estate TaxesDefault
General Real Estate TaxesExemptions
Property tax exemptions: publicly owned property, property used for religious purposes, and property owned by certain nonprofit organizations.
General Real Estate TaxesExemptions
Property tax exemptions: publicly owned property, property used for religious purposes, and property owned by certain nonprofit organizations.
Partial exemptions: owner-occupied homes and homes owned by veterans, senior citizens, and disabled.
General Real Estate TaxesExemptions
Property tax exemptions: publicly owned property, property used for religious purposes, and property owned by certain nonprofit organizations.
Partial exemptions: owner-occupied homes and homes owned by veterans, senior citizens, and disabled.
Exemptions subtracted from property’s assessed value (but not homestead exemption).
TaxationSpecial assessments
Special assessment: Tax levied against properties benefiting from public improvement (also called an improvement tax).
TaxationSpecial assessments
Special assessment: Tax levied against properties benefiting from public improvement (also called an improvement tax).Examples: street paving, sidewalk
addition.
TaxationSpecial assessments
Special assessment: Tax levied against properties benefiting from public improvement (also called an improvement tax).Examples: street paving, sidewalk
addition.
Special assessment creates lien against taxed property. Government can foreclose on lien if property owner fails to pay assessment.
Special assessments differ from general real estate taxes in the following ways:One-time charge
TaxationSpecial assessments
Special assessments differ from general real estate taxes in the following ways:One-time chargePay for a particular project, not ongoing
government operationsLevied only against properties that benefit from
the project
TaxationSpecial assessments
Special assessments differ from general real estate taxes in the following ways:One-time chargePay for a particular project, not ongoing
government operationsLevied only against properties that benefit from
the projectTax based on cost of project, not value of the
propertyProperty owners may pay in installments
TaxationSpecial assessments
TaxationSales tax
Real property usually not subject to sales tax, unless sale includes transfer of personal property. Tax must be paid on sale of tangible personal property.
TaxationSales tax
Real property usually not subject to sales tax, unless sale includes transfer of personal property. Tax must be paid on sale of tangible personal property.
Example: Business inventory and trade fixtures are sold along with real property.
TaxationDocumentary transfer tax
Documentary transfer tax: Tax on transfers of real property, based on the selling price (also called excise tax).
TaxationDocumentary transfer tax
Documentary transfer tax: Tax on transfers of real property, based on the selling price (also called excise tax).Current rate: 55 cents per $500 of value
or fraction thereof.
TaxationDocumentary transfer tax
Documentary transfer tax: Tax on transfers of real property, based on the selling price (also called excise tax).Current rate: 55 cents per $500 of value
or fraction thereof.
No documentary transfer tax is paid on amount of assumed loan.
SummaryEminent Domain and Taxation
Eminent domain Condemnation Ad valorem taxes Tax default Special assessment Tax exemptions Documentary transfer tax
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