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segregaTion oF properTy Taxes
Segregation is a word commonly used by the development industry to refer to what the Assessor calls a “parcel change”. A parcel change occurs when a property is divided by a new subdivision map, condominium plan or lot line adjustment. Segregation is the term the Assessor and Tax Collector uses to describe the separation of a single tax bill which then becomes prorated among individual owners. So the segregation is the separation of the tax amounts after the parcel change has occurred. Proration of taxes based on segregated tax bills is fairly easy and will be handled by escrow. It is the estimating and proration of unsegregated tax bills that is the subject of this section.
If the property taxes at the time of sale to your buyers are not segregated, as is almost always the case in condominium and condominium conversion developments, a plan must be in place to estimate with some accuracy what tax amount should be used for proration. If a future unsegregated bill is expected, a collection plan also needs to be in place to insure the timely payment of these taxes.
In addition to segregation, an increase in the assessed value due to a change in ownership and new construction can be under review with the Assessor during sales to individual buyers, causing a change in assessed value after bills have been issued and resulting in additional bills issued
after sales. Therefore, it is important to understand what triggers reassessment and what triggers segregation. Both come into play in properly planning for your tax prorations and possible tax collection.
A segregation is triggered by the recording of a tract map, parcel map, condominium plan or lot line adjustment. A map, plan or lot line adjustment in a new subdivision that records prior to December 31st will cause the segregation by the following tax year.
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