1.94% property tax on Richmond, CA

[Aastha Shrestha]

Hello BiggerPockets family, 
My situation: I purchased a 4plex with FHA loan on Nov 2021 at 810k on Richmond, CA(Contra Costa county). County is saying that my property tax is close to 16k(1.94% of the property value). I don't know why I am being charged 1.94% of property taxes. I always thought property tax is around 1.25% of the purchased value.
Is there a way to offset these taxes? 

[Paul T.]

Quote from @Aastha Shrestha:

Hello BiggerPockets family, 
My situation: I purchased a 4plex with FHA loan on Nov 2021 at 810k on Richmond, CA(Contra Costa county). County is saying that my property tax is close to 16k(1.94% of the property value). I don't know why I am being charged 1.94% of property taxes. I always thought property tax is around 1.25% of the purchased value.
Is there a way to offset these taxes?

Prop 13 limits secured property taxes to 1% of the assessed value, plus any special assessments. 1.25% is a good guide for total taxes.

You say the tax is 1.94% of the "value." What value? Your purchase price? Or the assessed value? In many instances, the assessed value is greater than the purchase price so the property taxes are higher than expected. If the assessed value is greater than the purchase price, one can timely appeal the assessment (with supporting facts, of course), and attempt to get the assessment down to the actual purchase price.

If the 1.94% is 1.94% of the assessed value, it appears that your property is subject to a number of special assessments (or an error). Each of those special assessments should be listed on your property tax bill (or supplemental property tax bill). As the special assessments are usually voted on by the voters, and voters are often ... let's just say "confused," it is impossible to know what special assessments the voters in Richmond may have approved for your property.

You say you bought in 2021. You don't say whether you are referring to tax year 2021-2022, or tax year 2022-2023. If it is tax year 2022-2023, presumably the County has increased your assessment by the allowable 2% over the 2021-2022 tax year, so that may be a small portion of the tax you are seeing.