Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2016

Property Tax Annotations

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Annotation 610.0116

610.0116 Valuation. A neighborhood shopping center is constructed in phases, and valued using the Building Residual Technique as each section of the property was completed. This technique determines the fair market value of the improvements by deducting the income imputable to the land from the fair market value of the total property. The fair market value, and not the base year value of the land is used during this process. If the assessor were to use the factored base year value of the land (which is greater than the fair market value), the resulting value of the new construction would be understated. The taxpayer's assertion that the property will be valued in excess of market value on the lien date is immaterial because the base year value of new construction is established as of the date of completion and not the lien date. On the subsequent lien date, the property, including the improvements, may be subject to a decline in value adjustment pursuant to Revenue and Taxation Code section 51(b). However, this would not change the base year value of the pre-existing property, as previously established, or the initial base year value of the improvements. C 8/31/2011.