The Santa Clara County Board of Supervisors unanimously approved County Assessor Larry Stone’s recommendation to dramatically increase the number of property owners eligible to receive a “too low to assess” exclusion, benefiting mostly small-business owners.
The new ordinance doubles the amount of the exclusion (from $5,000 to $10,000) for business personal property and adds two new categories of property eligible for the exemption:
• Possessory interests (a taxable possessory interest is created when a person or entity uses publicly owned real property) with a full value of $10,000 or less. The Assessor’s Office estimates that approximately 1,200 businesses and/or individuals will no longer have to pay the tax.
• Real property and parcels with a total adjusted base year value of $5,000 or less. These parcels consist of vacant property in remote locations with limited utility and marketability. An estimated 2,000 parcels could benefit from the expansion of the low-value ordinance. The ordinance will not apply to properties under the California Land Conservation Act, Mills Act contracts, timber production zone designation, nonprofit golf courses and low-value properties that are component parts of larger total property economic units.
“This low-value ordinance is a win-win for both the county and some taxpayers,” Stone said. “For every $10,000 of assessed value, the county sends a tax bill of $100. The ordinance will eliminate property-tax bills of $100 or less.”
Stone’s recommendation to the Board of Supervisors estimated that the cost to assess and collect from the low-value properties was approximately $1.89 million, for a property-tax revenue of $602,000.
The Assessor’s Office estimated that 7,600 owners have total business property valued between $5,000 and $10,000 that would now be excluded from taxation.
