Below is a helpful tip from the Davis-Stirling.com Newsletter by ADAMS | STIRLING PLC regarding the taxes on common areas . . .

From time-to-time, I run into a planned development paying property taxes on its common area property. They should not be doing so. The tax code specifically allows planned developments to avoid double taxation on its common areas. (Rev. & Tax Code § 2188.5)

Taxes on common property are already paid indirectly by the membership through their own property taxes. (Lake Forest CA v. County of Orange; Nellie Gail Ranch OA v. McMullin.) The taxable value of common areas is reflected in the increased market value of their properties created by common area lots, whether they be used for clubhouses, parks, or some other function.

If an association is paying property taxes, it is likely the developer failed to designate the subject parcels as common areas when submitting the original development plan, causing the assessor to treat them as taxable parcels.To fix the oversight, the parcels need to be remapped as common area parcels. It allows county assessors to keep them on the tax rolls, but reduce the assessed valuation to $1 so that no tax bills are generated in the future. For more information, see “HOA Tax Returns, Deadlines & Property Taxes.”

DISCLAIMER. The Davis-Stirling.com Newsletter by ADAMS | STIRLING PLC provides commentary only, not legal advice. For legal advice, you’ll need to hire legal counsel.  You can hire ADAMS | STIRLING PLC; Keep in mind they are considered corporate counsel to associations only.