In November each year (due December 10), property owners pay their 1st installment of secured property taxes to the County Tax Collector. The 2nd installment is billed by the County in February and due by April 10. Your property tax bill consists of the General Tax - a 1% tax based on the Assessed Value of your property - and Other Special Charges. The bulk of the tax remitted is in the General Tax category. Other Special Charges are typically parcel taxes and fees added by Special Districts such as sanitary, school, college, hospital, mosquito, and open space districts.
Looking at the detailed Special Charges, it is easy to identify who gets what. The Town does not have any Special Charges or Taxes collected via property taxes. But what about that 1%, the largest number on any tax bill in Atherton? Who get's that?
Dividing Up the 1%
The median home price in Atherton in 2019 was $7,100,000. That's down from a high of $7,250,000 in 2018. The 1% General Tax on a property valued at $7.1 million is approximately $71,000. That 1% General Tax is divided up based on Tax Rate Areas, but for the basic tax rate area (TRA 001-001), the breakdown is as follows for each $1 of that General Tax:
San Mateo County (23.60%)
Menlo Park City Elementary (16.64%)
Menlo Park Fire District (15.70%)
Sequoia High School (15.56%)
Town of Atherton (10.56%)
San Mateo Junior College (6.76%)
County Education Tax (3.52%)
County Library Tax (3.44%)
Mid-Pen Regional Open Space (1.83%)
Sequoia Hospital District (1.83%)
County Harbor District (0.35%)
Bay Area Air Pollution (0.21%)
Mosquito Abatement District (0.19%)
Atherton Channel Drainage (0.18%)
These numbers include the Educational Reimbursement Augmentation Fund (ERAF). ERAF is a State allocation that takes away local property taxes from designated agencies and funnels them through the State to meet the State's mandated funding levels for education. At the end of that calculation, the State remits the residual back to the local agencies. The amount that is returned to each agency varies year by year and is not a dependable source of revenue for operations. Removing ERAF, the Town's share of that $1 of General Tax is 8.57 cents.
So how much does the Town get of that $71,000 in property taxes paid by that median-priced property?
The Town receives $6,085.
Assessed Valuation and Taxable Parcels
There are 2,618 taxable parcels in the Town. The total net taxable value (total Assessed Valuation) for the Town is $11,664,530,505. That amount represents an increase of 6.6% over the 2018/19 fiscal year, which is slightly less than the increase experienced countywide at 7.0%. The assessed value increase from 2018/19 to 2019/20 was $723,370,052 and is broken down into the following components:
The bulk of the 6.6% increase is attributable to the home sales/transfer of ownership at 3.11% ($340,354,973). Below that, the net value change from the 2% Proposition 13 CPI at 1.82% ($199,655,346). The next largest component is new residential construction being reassessed and coming onto the tax rolls reflecting 1.29% ($140,618,936). But these numbers represent the total new assessed valuation only. This is the amount each property gets taxed upon for the 1% General Tax. Breaking that down into the 8.57 cents for each dollar that the Town receives, the amounts are as follows:
Out of the $723,370,652 in new assessed valuation, the Town receives $478,871 in new property tax receipts.
Atherton's Assessed Valuation continues to post growth for the 9th year in a row, but at a slower pace. The table below reflects the growth in Assessed Valuation over the past 10 years.
Fiscal Year Growth
The average annual change over the past 20 years has been 8.21%. As in prior years, the Town's anticipated future growth is tied to new construction additions, sales transactions and the annually applied California CPI adjustment under Proposition 13. There are fewer and fewer pre-Proposition 13 properties in Town that remain on the tax rolls at reduced rates. Most homes have been remodeled or transferred in ownership since 1979. Proposition 8 was passed in 1978 as an amendment to Proposition 13 and it annually caps the assessed value of property as of the lien date at the lessor of its market value or its factored base year value. Absent a transfer of ownership or remodel, these homes will remain at a lower base year taxable amount. In Atherton, there are only 37 of the 2,618 parcels awaiting Proposition 8 restoration. Their restoration would only move the needle 0.5%.
For more information on any of the above, feel free to give me a call or send me an email. Linked here is the latest Property Tax Report for the Town with more information on the data above.