Who Tops the California Property Tax Roll?

The Tesla Fremont Factory is joining the list of properties with the highest property taxes in the State of California, according to a new report from Yardi. The Tesla Factory has the second-highest property tax bill in the state, following Disneyland Resort, which has the highest property tax bill in the state. Nationally, Disneyland Resort still has a big lead, it is ranked 22th nationally and second outside of New York, while Tesla is ranked 67^th nationally and 13^th outside of New York.

“2017 was the first year since Tesla took ownership of the Fremont facility in 2010 that property taxes came into play,” Adel Dobriban of Yardi, tells GlobeSt.com. “If Tesla resumes its tax abatement regimen, its tax contributions will likely not impact revenue as much as expected but should impact growth in other ways, mainly in terms of job creation and value-added contributions. Per Tesla’s recently published economic contributions report, it supplied the state and government with a total of $328 million in taxes this past year. Of course, property taxes only make up a small portion of the total, but it remains to be seen how the numbers will change in the coming years.”

In general, hotel and entertainment venues rule the top of the property tax list, but this year, there was a decrease in the presence of these properties. “Though we can’t be entirely certain as to why a decrease in property taxes was showcased only by hospitality and entertainment properties, it is likely that the variation was linked to lower market values and a more restrained momentum in terms of investment compared to previous years, especially with off-shore investment declining in 2017,” explains Dobriban.

Aside from this change and Tesla’s appearance on the list, there were only nominal changes from 2016 to 2017. “Overall property assessment and valuation has experienced some marginal changes in 2017, mostly as a reflection of market value fluctuations and construction activity,” says Dobriban. “Variations in property values and therefore taxes are expected to occur year-over-year, especially since they are influenced by several dynamic factors. In California Proposition 13 is still in the forefront of the property tax debate even with statewide tax revenue on the rise per assessor records.”

While the changes in 2017 were limited, next year Dobriban expects to see significant differences as a result of the new tax plan. While taxes have already been submitted, he says that we won’t know the true effects until next year. “The 2017 tax bill is expected to significantly impact all areas of the real estate industry, some more than others,” he explains. “The precise effects of the tax overhaul and the quantifiable changes both in revenue and tax burden will become apparent in 2018, and they will in all likelihood make waves in next year’s top 100.”