From the SD County Assessor – I am happy to provide comps:
The County Assessor’s Office wishes to notify property owners that tax relief is available if their property’s market value has fallen below its assessed value. Your property’s assessed value is shown in the upper right hand corner of your current tax bill. For all practical purposes, this only affects those property owners who purchased their property at the height of the current real estate market.
Under State law, a temporary reduction in assessed value can be made when the market value, as of January 1, 2010, falls below the assessed value.
Once reduced, the Assessor’s Office must then annually review the value of the property until the Proposition 13 value is fully restored (adjusted with the annual CPI, not to exceed 2%). Consequently, a new request for review is not required if your property currently has a temporary reduction under this provision.
Property owners who believe their property’s market value has fallen below its assessed value should file an Application for Review of Assessment with the Assessor’s Office as soon as possible but no later than May 14, 2010. They should provide their opinion of value and supporting documentation, such as comparable sales, current listings, or a recent appraisal indicating the value as of January 1, 2010. Ideally, comparable sales should have occured between 10/1/09 and 3/31/10.
You can apply for this reduction yourself, for free, directly with the Assessor’s Office. Numerous private businesses and individuals mail solicitations to property owners offering their assistance in this process for a fee. While property owners are certainly at liberty to use these private companies, they can apply for this reduction themselves at absolutely no cost.
This application is available at this link, in all the Assessor’s branch offices, or by phoning the Assessor’s Office at (858) 505-6262. When complete, please return the application no later than May 14 to San Diego County Assessor/Recorder/Clerk, 1600 Pacific Highway, Suite 103, San Diego, CA 92101.
Property owners who apply for this temporary reduction will be notified of the results of their request no later than July. If they still disagree with the value, a formal assessment appeal process is available. This application must be filed with the Clerk of the Assessment Appeals Board between July 2 and November 30.
What’s the downside of this? I’m not really seeing one…
Downside? We’re positive and optimistic today (though it’s early).
If only there were some homes below what owners paid. 😉
Under State law, a temporary reduction in assessed value can be made when the market value, as of January 1, 2010, falls below the assessed value.
Yeah, that’s one interpretation. The other being that once prices rebound the Assessor is still limited to 2% per year under Prop 13.
“Once reduced, the Assessor’s Office must then annually review the value of the property until the Proposition 13 value is fully restored (adjusted with the annual CPI, not to exceed 2%). Consequently, a new request for review is not required if your property currently has a temporary reduction under this provision.”
Yes and no. If you got a reduction last year and your home value hasn’t come back up you don’t need to request a review again this year to keep it, but if your property went down again, the annual review won’t automatically result in a further reduction. You’ll need to request another review for that.
The value is reduced under what was called Proposition 8 when it was passed by the voters sometime around 1980. Prop 8 allows for a temporary reduction in assessed value when the market value drops below the factored base (Prop 13) value AND for restoration of the factored base year value when the value increases above the factored base year value. The restoration was challenged in court by someone the last time values dropped and were restored, and he lost the case.
In most states, the taxing jurisdictions just raise the tax rate when values go down. That’s happening in Arizona now. In California the tax rate can’t be increased when the assessed values decline. Property tax revenue can actually decline. Or, as has happened since ERAF in the early 1990’s, the State can seize and redirect the money to ita coffers.
Rob Dawg,
Somebody better figure that out because it will make a huge difference eventually.
Jim’s interpretation could mean double the property taxes forever for some houses relative to your alternative interpretation.
Somebody better figure that out because it will make a huge difference eventually.
The courts aren’t taxpayer friendly, even when the law is on the taxpayer’s side:
http://www.propertytaxrefunds.biz/
We had a reduction on our previous home during the 2003 slump in San Mateo County. The assessment was reduced, and remained reduced until the comps showed the house had returned to its original Prop 13 level. At that point, the assessment was raised to original Prop 13 level plus a 2% increase for each year that had passed since purchase. IOW, our “normal” assessment for the year it was raised back was the same as it would have been had it never been reduced temporarily.
tj & GeneK,
In that case, the responsible thing to do is to buy & bail, so you get a permanent tax reduction instead of just a temporary one.
Educate me: why is it ok for property tax to drop when your house loses value but it is capped on the way up when gaining value?
That hardly seems appropriate. Why isn’t it the same limit of 2% going down as it is up?
In that case, the responsible thing to do is to buy & bail
There appears to be a clause regarding “physical changes” to the property creating a new baseline; that could prove useful to those that really don’t want to move.
“In that case, the responsible thing to do is to buy & bail, so you get a permanent tax reduction instead of just a temporary one.”
If you bought your house strictly as an investment and only care about the money that would certainly be true.
“Educate me: why is it ok for property tax to drop when your house loses value but it is capped on the way up when gaining value?”
Because the majority of CA voters are homeowners who pay property taxes…
Gene, thanks…I figured as much.
“When the people find that they can vote themselves money, that will herald the end of the republic.”
– Benjamin Franklin