Monday, February 9, 2009

200,000 Silicon Valley homeowners up for property tax reductions

200,000 on deck for property tax reduction.
Some 200,000 Silicon Valley homeowners, about half those in the Santa Clara County region, may soon enjoy a hefty reduction in property taxes.

by Broderick Perkins
© 2008 DeadlineNews.Com
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Deadline Newsroom - Some 200,000 Silicon Valley homeowners, about half those in the Santa Clara County region, may soon enjoy a hefty reduction in property taxes.

The reduction will be temporary, but that could be a long temporary and the break could save some homeowners hundreds if not thousands of dollars a year -- and they may not have to lift a finger to get the small windfall.

Santa Clara County Assessor's office has recognized the steep decline in real estate property values and has begun a wholesale review of some 200,000 property values to determine if they are eligible for a reduction in assessed values.

All properties involved in transactions since January 1, 2000 will get market values reviewed.

"Obviously, not every community is the same. The value decline in Palo Alto and Los Altos is vastly different from the much steeper degree of decline in Gilroy, Morgan Hill, East San Jose or Milpitas," said County Assessor Larry Stone.

Property taxes in Santa Clara County amount to about 1.25 percent of the assessed property value. The assessed property value is set, most often, based on a property's last sales price. For example, a property purchased for $500,000 comes with property taxes each year of about $6,250. However, when property values fall (or rise), provisions in tax law allow the assessor to lower (or raise) assessed values and, right now, that could mean lower values and lower property taxes.

The review should be completed in June with any reassessed values to show up on the 2008 to 2009 property tax rolls due beginning later this year.

Home prices tabulated by a host of Santa Clara County sources show prices have fallen by as much as 50 percent or more in the last year, depending upon the location of the property. Forecasts call for continued drop in prices and prolonged depressed values. Once values return to their pre-adjusted levels, however, property taxes can be returned, on a fast track, to those levels.

Even after the assessor lowers any property values, homeowners can still appeal the assessed value -- at no cost -- by filing an appeal directly with the assessors office.

The assessor cautioned taxpayers to be wary of solicitations promising reduced assessed values in exchange for a fee. A recent solicitation this tax year sought to get homebuyers to send in $179 for a property value assessment appeal, after the period for such appeals had already ended.

See: Beware bogus 'Property Tax Reassessment' letter

"It is outrageous. There's simply no reason for a property owner to pay a fee to a private company for a service taxpayers receive from the Assessor’s Office without charge. Property owners most likely eligible for an automatic reduction in their property’s assessed value are being inundated by these questionable operators who are feeding upon the increased fears of homeowners stressed by a declining real estate market and the loss of equity," said Stone.

"My best advice on hiring someone to help you appeal your assessed value is to wait until you get your notification card,” said Stone.

Last year, the Assessor’s Office temporarily reduced the assessed value on over 45,000 properties for a total reduction in excess of $5 billion.

"Everyone who received a reduction last year is nearly certain to receive at least the same level of reduction, and perhaps substantially more. While I rarely make predictions, I fully expect that the number of property owners receiving reductions will increase this year," said Stone.

Between now and June, the Assessor’s Office will review the assessed value of nearly 200,000 properties to determine if the market value, as of January 1, has fallen below the original assessed value.

Once all properties are assessed, the Assessor’s Office will mail an assessment notification card to every property owner. This year, that notice is expected to arrive during the last week of June, a tad later than usual because of the extra workload.

If a property owner disagrees with the value on the notification card, they are encouraged to contact the Assessor’s Office to request a review. A simple interactive form is available on line on the assessor’s website.

Again, the service is free.

Avoid official-looking solicitations that claim "due dates" and request "payments due."

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!

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