Friday, July 24, 2009
by Broderick Perkins
© 2008 DeadlineNews.Com
Unauthorized use of this story is a copyright violation -- a federal crime
Deadline Newsroom - Take a good hard look at your property tax assessment.
If your home has lost value in recent years, there's a chance you should also be paying a smaller property tax bill -- slashed by as much as $1,000 or more.
Santa Clara County Assessor's office has already reduced the assessed value of some 90,000 properties, among 200,000 properties the office reviewed for the current 2009-2010 tax year.
Among those properties with already reduced assessed values, the reduction averaged $181,000 -- that's nearly a $2,000 annual savings.
With another 10,000 other homeowners are already in line ahead of you for a similar reduction, if you think your assessment is too high, you'd better file for a review quickly.
Under Proposition 13, your property tax is about 1 percent of your homes' assessed value, plus other fees for government bonds. Property taxes pay for certain local government costs including schools and government agencies.
There are some 400,000 assessed homes in the county, however, those purchased during the height of the market are those most likely to experience reduced values, due to falling market prices.
Under Proposition 13, a property's assessed value begins with the original "base year value" or the market value of the home when purchased -- typically, the sales price. A new base value is set with each purchase or new construction. Subsequently, the assessed value can increase by no more than 2 percent each year, as the "factored base year value."
In June, the assessor mailed every homeowner a "Notification of Assessed Value" on a beige two-sided postcard which indicates your property's assessed value. The card also indicates if the assessor has already lowered your assessed value.
Lowered or not, under another tax law, Proposition 8, if you believe your assessed value is too high, you have until Aug. 15 to seek a no-cost review of the value.
"Ideally go to the web site, or you can call, write, fax, email or come into the office and do the same thing and we will conduct an informal review," said Assessor Larry Stone.
If you pay your property taxes in equal monthly installments through escrow with your mortgage lender, you still must file for the review yourself. You should, however, contact your lender to determine how it will handle any change to your assessed value.
The online review request is the speediest way to accomplish the task.
Most of the information you need to complete "Prop 8 (Decline-in-Value) Request Form" online is on your "Notification of Assessed Value" card -- parcel number, address, owner name, etc. Other information is on the Web site.
In addition, you are asked to provide at least three comparable sales as evidence of your property's value. The sales should have been completed before, but as close to Jan. 1, 2009 as possible. That's because the law requires the assessor to value properties on Jan. 1 and you want comparables dated as near that date as possible.
The comparables should be homes as identical to your own as possible in terms of number of rooms, square footage, age, features, etc.
The real estate agent you hired when you purchased your home, the seller's real estate agent, or a real estate agent who works the neighborhood can also find the most recent comparable sales for you.
Likewise online real estate services like Zillow.com, PropertySharks.com and Cyberhomes.com offer comparables.
The assessor office's own online Property Assessment Information System, also provides records of properties' assessed values, which can serve as comparables, provided they are timely.
Inside the "Property Assessment Information System," you can search your street and nearby streets in your neighborhood for comparable sales information from the rolls of assessed properties. You can also look at the assessed value of comparable properties over time to see if they are moving up or down to further your case.
In any event it's important to file for a review quickly. The deadline is weeks away and currently there are more than 10,000 requests for a review, as a result of this year's assessment notice mailing.
If by Aug. 15, the assessor determines the market value of your property as of January 1st is lower than the assessed value, you will be notified that your assessed value will be lowered to the market value. Then, the adjusted value will appear on your annual property tax bill mailed in September.
Also by Aug. 15, the assessor will let you know if your review request has been denied or, because of the volume, the office didn't get to your review. You will still have until Sept. 15 to file for a formal $30 assessment appeal hearing with the Clerk of the Appeals Board.
Keep in mind, a Proposition 8 reduction in your assessed value is temporary and does not change your Proposition 13 factored base year value.
Once you have a reduction, the assessor must review your property's value each year. Whenever the office determines your value has returned to the factored base year value -- the base year value plus 2 percent each year -- the factored base year value will be immediately reinstated.
That could mean, from one year to the next, you could experience more than an annual 2 percent, per year increase in your property taxes. In past down and up housing market cycles, Proposition 8 increases and decreases have been in the double digits.
"You could see a 10 percent increase in one year," says Stone.
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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, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.
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