Common Areas. Real estate owned by a homeowners association as common area is not subject to property taxes. Taxes on common property are indirectly paid by the membership through their own real property taxes. The taxable value of common areas is reflected in the increased market value of members' properties created by common area pools, clubhouses, riding trails, parks, etc. Property taxes on common areas are, therefore, billed to and paid by all homeowners individually, not the association. (Lake Forest CA v. County of Orange; Nellie Gail Ranch OA v. McMullin.) In planned developments, there is a specific code section that applies: Revenue & Tax Code §2188.5.
Exceptions. Although associations do not pay property taxes the County Tax Collector collects fees and charges for special districts within the County. A common fee is a sanitary district charge. There may be charges for other districts such as vector control (mosquito abatement), library taxes, parcel taxes and special district user fees levied by water districts. Contact phone numbers appear on tax bills if you have any questions about the charges and whether they should apply to the common area parcels.
ASSISTANCE: Associations needing legal assistance can contact us. To stay current with issues affecting community associations, subscribe to the Davis-Stirling Newsletter.