Special Property Considerations

[EAS 42-223]

Property in Another State

When a client owns property in another state, it is necessary to convert that state's values into figures that are comparable to California's. This is accomplished by using the following conversion formula:

Determine the assessed value of the property in the other state. This may be accomplished by viewing a property assessment statement or may necessitate a telephone call to the other state.
Divide the above figure by the assessment rate from that state.
Use the figure arrived at in step 2, to determine the value of the client's real property.

Property Outside of United States

If the client owns or is buying property located outside of the United States, the full value is determined on the basis of the rate of exchange in American dollars, regardless of the manner by which other units of government determine the full value.

Property in Militarily Occupied Areas

The ownership and value of property is considered to be doubtful and the facts concerning the property cannot be ascertained when the country is:

Actively at war, or
In conquered or occupied status.

If it is impossible to obtain information on the property located in this area, then the presumption is that continued ownership is in doubt and the property has no present value in determining eligibility.

Tax Exemptions

Veterans, and in some cases their widows and parents, are allowed certain tax exemptions which are then applied to their real property. If the record used to determine the full value of the property shows only the amount of the assessment upon which taxes are based, the amount of the exemption must be determined and added to the taxable base to determine the full value. The EW may need to contact the appropriate assessor's office for information about the exemptions and the value of the property.

Adjacent or Contiguous Property

To determine the value of contiguous real property not considered part of the home but assessed with the home, use the following chart:

Determine the market value of the contiguous property. This is computed by adding the prorated share of the value of the total acreage to the value of the encumbrances which are on the contiguous property.
Determine the encumbrances against the contiguous property. This equals the total encumbrances against the property times the market value of the contiguous property divided by the market value of the total prop- erty.
Determine the value of the contiguous property. This is computed by subtracting the encumbrances against the contiguous property (from Step 2) from the market value of the contiguous property (from Step 1).

Example:

A client owns a parcel of land of three adjacent city lots. Their home is on one. One has the family garden and one has a small cottage. The parcel has always been assessed as one parcel. The client still owes a total of $18,000 on the whole parcel. The property assessment shows:

Acreage market value $45,000 ($15,000 per lot)
Improvements 1 house $30,000
1 cottage $15,000
Total Market Value $90,000

The EW determines that one of the contiguous lots and the cottage are not actually part of the home as they can be sold separately. A value on the contiguous property would be computed as follows:

Market Value of the Contiguous Property:

1/3 x $45,000 = $15,000 + 15,000 = $30,000

Prorated Encumbrances against the Contiguous Property:

$18,000 x $30,000/$90,000 = $6,000

The Value of the Contiguous Property: