Today is the day that income taxes are due, after which many people think about how well their current real estate deductions are working for them and if they’d be better off buying or selling a property. Santa Barbara along with other areas will see a lot of new housing market activity begin because of this recent attention to income tax deductions.
Speaking of taxes, depending on where you decide to own real estate can affect your property taxes tremendously. Santa Barbara County is covered under California’s Proposition 13 which was established in 1978 when it was overwhelmingly approved by voters. The proposition limits property tax to 1 percent of a homes assessed value, plus the rate necessary to fund local voter-approved bonds. Santa Barbara’s yearly property tax rate average calculates to around 1.1 percent with everything included. Prop 13 also limits the amount that your property tax can increase in California and Santa Barbara. An increase of 2 percent per year is maximum on properties not involved in a change of ownership or properties that did not undergo new construction. Newly acquired property is assessed at its new market value (usually the purchase price) and the value of any new construction is added to the existing base value.
Santa Barbara’s yearly property tax rate of 1.1 percent is very reasonable when compared with many other areas of the country. For instance, in Florida there are counties that top 2.3 percent in property tax rate and in New York and New Jersey there are several counties with property tax rates that exceed 4 and 5 percent.
Understanding all aspects, including taxes, of any real estate transaction you’re considering is important. I look forward to answering any questions you have and appreciate your inquiries!