Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2018

Property Tax Annotations

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Annotation 560.0020

560.0020 Lease-Purchase Contracts. Until such time as the United States takes clear title to property being purchased under the provisions of Public Law 92-313, whereby the U.S. Administrator of General Services is authorized to enter into lease-purchase contracts with private builders; payments are to be credited against the purchase price of the property; and upon the fulfillment of all the terms and conditions of the contract, title to the property is to be transferred to the United States, such property is fully subject to tax. The property should be appraised at the full cash value of the fee-simple rights throughout the term of the lease-purchase contract, it should not be regarded as enforceably restricted, and no division should be made between the leasehold and reversionary interests. The provisions of article XIII A of the California Constitution are applicable to such properties.

In some instances the land is owned by the government but leased to the developer in order to assist him in obtaining financing. Such a lease does not create a taxable possessory interest in the land, for the developer does not retain an exclusive right to possession or beneficial use of the nontaxable publicly owned property. LTA 2/27/1979 (No. 79/41).