This information page, provides an overview of the property tax systems and should be helpful to new property taxpayers.
Although property taxes are collected by the Treasurer-Tax Collector, tax laws are enacted by the California State Legislature.
Property tax, or millage tax, is an ad valorem tax that an owner is required to pay based on the value of the property being taxed. Unless the California Constitution or federal law specify otherwise, all property is taxable. Property is defined as all matters and things including real, personal, and mixed that a private party can own. The distinction between real and personal property is significant because the tax assessment procedures vary depending upon the type of property:
- The Legislature may either exempt personal property from taxation or provide for differential taxation. The Legislature does not have this power over real property.
- Personal property is not subject to Proposition 13 value limitations.
- Special assessments are not applicable to personal property.
The distinction between real and personal property is made as follows:
Real estate or real property includes all of the following:
- The possession of, claim to, ownership of, or right to the possession of land.
- All mines, minerals and quarries in the land, all standing timber whether or not belonging to the owner of the land, and all pertinent rights and privileges.
- Improvements – defined as all buildings, structures, fixtures and fences erected on or affixed to the land and all fruit, nut bearing or ornamental trees and vines not growing naturally and not exempt from taxation except date palms under eight years old.
Personal property is defined as all property, either tangible or intangible, except real property. All tangible personal property is generally taxable except where specific exemptions are provided. Tangible personal property is any property, except land or improvements, that may be seen, weighed, measured, felt, touched, or which is in any other manner perceptible to the senses.
Examples of taxable tangible personal property include portable machinery and equipment, office furniture, tools, and supplies. Examples of non-taxable tangible personal property are household goods and personal effects, non-commercial boats worth $400 or less and goods held for sale or lease (i.e. inventories) during the ordinary course of business.
Examples of non-taxable intangible personal property include notes, corporate securities, shares of capital stock, solvent credits, bonds, deeds of trust, mortgages, liquor licenses, insurance policies, club memberships, and copyrights.
Although property taxes are collected by the Treasurer–Tax Collector in Santa Barbara County; the tax laws, as described above, are enacted by the California State Legislature.