Cap Val Reassessment Shock Calculator

Acquisitions trigger reassessment to purchase price, often spiking taxes.

Purchase price

Prior assessment

Millage rate

Assessment ratio %

Annual tax increase

$99,000

New annual tax

$264,000

Prior annual tax

$165,000

How the math works

New assessment = purchase × ratio. Tax = assessment × millage/1000. Increase = new − prior.

$12M × 100% × 2.2% = $264k new vs $165k prior = $99k annual tax increase.

How to Use

Enter purchase price.
Enter prior assessment.
Enter millage rate.
Enter assessment ratio %.
Read tax increase.

Frequently Asked Questions

Reassessment trigger?

Sale of property (most jurisdictions). Major renovation. Petition for appeal. Statutory reassessment cycle (3-10 years). CA Prop 13: only at sale. NY: annual. Other states vary.

Shock magnitude?

Long-held properties in CA: 3-5x tax increase after sale (Prop 13 ratchet). Recent sales: smaller shocks. Commercial properties often reassess to 100% of purchase price. Residential capped at purchase price in some states.

Mitigation?

Negotiate tax proration at closing (buyer absorbs future year). Tax appeal post-closing. Structure as entity transfer vs asset sale (sometimes avoids reassessment). Long-term tax planning in acquisition underwriting.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.