California Code of Regulations › Title 18 - Public Revenues › Division 1 - State Board of Equalization-Property Tax (California Department of Tax and Fee Administration - Timber Yield Tax, See Chapter 11) › Chapter 1 - Valuation Principles and Procedures › Section 4 - The Comparative Sales Approach to Value

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
When reliable market data are available with respect to a
				  given real property, the preferred method of valuation is by reference to sales
				  prices. In using sales prices of the appraisal subject or of comparable
				  properties to value a property, the assessor shall:
(a) Convert a noncash sale price to its cash
				equivalent by estimating the value in cash of any tangible or intangible
				property other than cash which the seller accepted in full or partial payment
				for the subject property and adding it to the cash portion of the sale price
				and by deducting from the nominal sale price any amount which the seller paid
				in lieu of interest to a lender who supplied the grantee with part or all of
				the purchase money.
(b) When
				appraising an unencumbered-fee interest, (1) convert the sale price of a
				property encumbered with a debt to which the property remained subject to its
				unencumbered-fee price equivalent by adding to the sale price of the seller's
				equity the price for which it is estimated that such debt could have been sold
				under value-indicative conditions at the time the sale price was negotiated and
				(2) convert the sale price of a property encumbered with a lease to which the
				property remained subject to its unencumbered-fee price equivalent by deducting
				from the sale price of the seller's equity the amount by which it is estimated
				that the lease enhanced that price or adding to the price of the seller's
				equity the amount by which it is estimated that the lease depressed that
				price.
(c) Convert a sale to the
				valuation date of the subject property by adjusting it for any change in price
				level of this type of property that has occurred between the time the sale
				price was negotiated and the valuation date of the subject property.
(d) Make such allowances as he deems
				appropriate for differences between a comparable property at the time of sale
				and the subject property on the valuation date, in physical attributes of the
				properties, location of the properties, legally enforceable restrictions on the
				properties' use, and the income and amenities which the properties are expected
				to produce. When the appraisal subject is land and the comparable property is
				land of smaller dimensions, and it is assumed that the subject property would
				be divided into comparable smaller parcels by a purchaser, the assessor shall
				allow for the cost of subdivision, for the area required for streets and
				alleys, for selling expenses, for normal profit, and for interest charges
				during the period over which it is anticipated that the smaller properties will
				be marketed.
1. Amendment
				  of subsections (c) and (d) filed 11-30-82; effective thirtieth day thereafter
				  (Register 82, No. 49).
Note: Authority cited: Section
					 15606,
					 Government Code. Reference: Sections
					 110,
					 110.1,
					 110.5
					 and
					 401,
					 Revenue and Taxation Code; and Article XIII A, Sections
					 1 and
					 2, California
					 Constitution.