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Glossary of Terms
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A B
C D E
F G H
I J K L
M N O P
Q R S T U
V W X Y Z
A
Ad Valorem
Latin phrase meaning in proportion to the value. In California, the property tax
is considered to be an Ad Valorem tax.
Appraisal Unit
The unit that people in the market typically buy and sell.
Assessed Value
The taxable value of a property against which the tax rate is applied.
B
Base Year Value
In accordance with section 110.1, a property's base year value is its fair market
value as of either the 1975 lien date or the date the property was last purchased,
newly constructed, or underwent a change in ownership after the 1975 lien date.
C
Change in Ownership
A transfer of a present interest in real property, including the beneficial use
thereof, the value of which is substantially equal to the value of the fee interest.
Comparative Sales Approach
An approach to value by reference to sale prices of the subject property or comparable
properties; under rule 4, the preferred approach when reliable market data are available.
Cost Approach
A value approach using the following procedures to derive a value indicator: (1)
estimate the current cost to reproduce or replace an existing structure without
untimely delays; (2) deduct for all accrued depreciation; and (3) add the estimated
land value and an amount to compensate for entrepreneurial profit (if present).
D
Digital Signature
An electronic identifier created by computer intended by the party using it to have
the same force and effect as the use of a manual signature. See also Electronic
Signature.
E
Economic Obsolescence
An element of accrued depreciation; a defect, usually incurable, caused by influences
outside the site—sometimes called external obsolescence.
Electronic Filing
An Application for Changed Assessment that is electronically filed with the clerk
of the board. Such application is an electronic version of information that would
otherwise be filed by paper and is subject to the same rules as those for paper
submission. Such transmission will be accomplished in conformance with rules set
forth by the clerk of the board to insure authenticity of the document by means
of verifying that its content has not been altered during transmission. Any electronically
filed application should be printable on a State Board of Equalization authorized
application form.
Electronic Signature
The means of verifying the authority and authenticity of an Application for Changed
Assessment electronically filed by an applicant or by an applicant's agent. Electronic
filers must meet the criteria established by the clerk of the board to insure that
they conform to specific technological means of identifying the filer and processing
electronically filed documents. See also Digital Signature.
F
Fair Market Value
The amount of cash or its equivalent that property would bring if exposed for sale
in the open market under conditions in which neither buyer nor seller could take
advantage of the exigencies of the other and both with knowledge of all of the uses
and purposes to which the property is adapted and for which it is capable of being
used and of the enforceable restrictions upon those uses and purposes.
Fee Simple Rights
A title that signifies ownership of all the rights in a parcel of real property,
subject only to the limitations of the four powers of government.
Fixture
An item of tangible property, the nature of which was originally personal property,
but which is classified as real property for property tax purposes because it is
physically or constructively annexed to real property with the intent that it remain
annexed indefinitely.
Full Value
The fair market value, full cash value, or such other value standard as is prescribed
by the Constitution or the Revenue and Taxation Code.
Functional Obsolescence
Curable: an element of accrued depreciation, a curable defect caused by a defect
in the structure, materials, or design. Incurable: an element of accrued depreciation,
a defect caused by a deficiency or a super adequacy in the structure, materials,
or design, which is not financially feasible or practical to correct.
H
Highest and Best Use
The most profitable use of a property at the time of the appraisal; that available
use and program of future utilization that produces the highest present land value;
must be legal, physically possible, financially feasible, and maximally profitable.
I
Improvements
All buildings, structures, fixtures, and fences erected on or affixed to the land,
all fruit, nut bearing, ornamental trees and vines, not of natural growth, and not
exempt from taxation, except date palms under eight years of age.
Income Approach
Any method of converting an income stream or a series of future income payments
into an indicator of present value.
L
Leasehold
The lessee's interest in property; the right to use and occupy real property during
the term of a lease, subject to any contractual restrictions.
Lien Date
All taxable property (both state and locally assessed) is assessed annually for
property tax purposes as of 12:01 a.m. on January 1, which is called the lien date.
It is referred to as the lien date because on this date the taxes become a lien
against all real property assessed on the secured roll.
N
New Construction
Any addition to real property, whether land or improvements (including fixtures)
since the last lien date; any alteration of land or improvements (including fixtures)
since the last lien date that constitutes a major rehabilitation thereof or which
converts the property to a different use.
P
Personal Property
Personal property includes all property except real property.
Possessory Interests
Interests in real property that exist as a result of: (1) a possession of real property
that is independent, durable, and exclusive of rights held by others in the real
property, and that provides a private benefit to the possessor, except when coupled
with ownership of a fee simple or life estate in the real property in the same person;
or (2) A right to the possession of real property, or a claim to a right to the
possession of real property, that is independent, durable, and exclusive of rights
held by others in the real property, and that provides a private benefit to the
possessor, except when coupled with ownership of a fee simple or life estate in
the real property in the same person; or (3) Taxable improvements on tax-exempt
land.
Principle of Substitution
When several similar or commensurate commodities, goods, or services are available,
the one with the lowest price attracts the greatest demand and widest distribution.
This principle assumes rational, prudent market behavior with no undue cost due
to delay. A buyer will not pay more for one property than for another that is equally
desirable.
Property
Property includes all matters and things—real, personal, and mixed—that are capable
of private ownership.
Purchase Price
The amount of money a buyer agrees to pay and a seller agrees to accept in an exchange
of property rights; sale price is based on a particular transaction, not necessarily
on what the typical buyer would pay or the typical seller would accept.
Q
Quasi-judicial
A term applied to the action, discretion, etc., of public administrative officers
or bodies, who are required to investigate facts, or ascertain the existence of
facts, hold hearings, and draw conclusions from them, as a basis for their official
action, and to exercise discretion of a judicial nature.
R
Real Property
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 rights and privileges appertaining thereto; and
improvements. In California property tax law, the term is synonymous with "real
estate."
S
Supplemental Assessment
An assessment of the full cash value of property as of the date a change in ownership
occurs or new construction is completed which establishes a new base year value
for the property or for the new construction.
T
Taxable Possessory Interest
Possessory interests in publicly owned real property. Excluded from the meaning
of taxable possessory interests, however, are any possessory interests in real property
located within an area to which the United States has exclusive jurisdiction concerning
taxation. Such areas are commonly referred to as federal enclaves.
Taxable Value
For real property subject to article XIII A of the California Constitution, the
base year full value adjusted for any given lien date as required by law or the
full cash value (market value) for the same lien date, whichever is less, as set
forth in section 51(a). For personal property, the full cash value for the lien
date each year.
Trial de novo
A new trial or retrial in which the whole case is retried as if no trial whatever
had occurred in the first instance.
V
Value
The power of one commodity to command other commodities in exchange; a ratio of
exchange; present worth of future net benefits.
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