The SF Chronicle writes – in reaction to? in support of? — the recent Larry Ellison-lowering-the-property-values-on-his-multi-million-dollar-home-story and tell us, you too can be like Larry. Evidently it’s not just San Mateo county’s assessor’s office that is anxious to start lowering billionaire’s property tax bills, they want to lower yours too! Highlights:
…If your home is worth less than you paid, chances are you also can get a temporary reduction in your property taxes – without a battery of lawyers or dubious arguments about functional obsolescence.
Just ask your county assessor for an informal review of your assessed value. It’s free and easy to do yourself.
…
Rather than wait for requests, assessors in some Bay Area counties hit hard by the housing downturn – including Contra Costa, Alameda, Santa Clara and Solano – are automatically reviewing homes purchased in the past few years to see whether they qualify for a cut in assessed value for 2008-09…
The caveat, of course, is that it probably will only be for homes purchased recently:
…Most people who bought a home many years ago won’t get a reduction, even if their home’s value has fallen recently. Suppose you bought a house in 1985 for $200,000 and it was worth $900,000 in January 2006 but only $800,000 in January 2008. You won’t get a reduction because your assessed value (unless you greatly expanded the home) is much less than $800,000…
And Alameda County may not even need to wait for you to file a request for review because:
…The assessor is automatically reviewing 65,000 properties that have sold since July 1, 2004. “We will apply a mass appraisal technique,” says Russ Hall, the county’s chief deputy assessor.
Hall urges homeowners who think they might qualify for a reduction to request an informal review by June 2. His office will send all homeowners a notice of assessment in mid-July. “If you want to challenge that, you can file an appeal” by Sept. 15, Hall says…
And for those that think that recent homeowners should just suck it up and pay whatever their assessed value is remember this. Folks that purchased their home after July 1, 2004 (the automatic trigger for review) are not Larry Ellisons that can necessarily afford to pay more than they are supposed to. Would you also suggest to those people that are getting tax refunds from the state and federal government that they return the checks with a smiley face and say, “thanks, but no thanks”?
Hey Lauren,
We bought after 7/04, so we’ll be among the folks who may see their taxes drop. It’d be nice to get the break, and I agree with you that it’d be nice (and probably a lot more fair) to not be bearing such an outsized portion of the tax burden. And given the fact that a lot of people are paying more of their income than the government standard just to afford a house, this kind of a break would help a whole lot of families. That said, until we see some real tax reform (or the economy improves dramatically), the state is in a big fat mess. So if we can spare it, we’ll definitely think about donating the money to the schools or another cause we support.
Comment by Michele — April 3, 2008 @ 9:57 am
# 1
Didn’t you know what the property tax rate was when you bought your house in 2004? I looked at your blog and followed the link to the “tax reforms” you speak of. Brilliant tax reform…raise them.
Comment by Jack Richard — April 3, 2008 @ 12:18 pm
I did know. So you’re saying you wouldn’t want a break on your taxes if you could get it? Or that it’s okay for someone to pay dramatically higher taxes than someone else with the same value property? Or that it’s fair/good that the taxpaying burden, in the wake of Proposition 13, has shifted from homeowners to businesses, and particularly to the newest homeowners (who are often young families trying to make their way)? I think if you give my site more than a cursory glance, Jack, what you will see is that I think Proposition 13 needs to be reformed to correct those imbalances. And what that means to me is that people/businesses that can afford to pay, pay their fair share, instead of dumping it all on the shoulders of whoever has the misfortune of coming next.
Comment by Michele — April 3, 2008 @ 1:30 pm
And that’s where Amerika is today… privatize the gains and socialize the losses.
Comment by Jack B — April 3, 2008 @ 3:51 pm
Agreed.
You know, I should probably point out too that my post today was meant to be informational, not a statement of opinion. I reread it and realized it could be construed as my opinion, so I’ve added an attribution to make it clearer. My apologies if that was not clear.
Comment by Michele — April 3, 2008 @ 3:59 pm
Personally, I think that for anyone that bought recently- as in right smack in the middle of the boom- I don’t really feel any sympathy for them. People that bought during that period KNEW that they were buying in a bubble, and that home prices were too high. Everyone had options. Either you buy in a boom and take a gamble on prices taking a dramatic nosedive, or you do like almost half of us did and rented instead and wait it out until things become sensible again. Nobody forced anybody to buy anything.
So when I hear the Sob stories about poor young families who are now struggling, or all those folks who are now clamoring for tax cuts even though nobody bitched about anything when things were smooth sailing and their houses were going up in value, I don’t really want to hear it. Deal with it. Accept responsibility.Are they victims? What about the rest of us? What about people who make good salaries, live within their means, and at least did some simple mathematics and decided to not buy? Do I get any special treatment? Can I get my rent lowered?
I noticed that the other half of the page mentioned above dealt with the latest of bailout plans to help poor section 8 families avoid foreclosure. lately, the US just absolutely amazes me. What? You’re telling me that I- Joe Shmo working at Mcdonalds can go out, borrow 500k for some POS that I know I’ll never be able to pay for and then have Uncle Sam come bail me out? Sweet! It also appears that huge financial corporations like Bear Stearns will never fail because the Fed will come to the rescue- saving them from their own recklessnesses. Again- amazing. We’re living in a country that is becoming increasingly hypocritical.If that’s the case, I’m buying two brand-new Bentleys right now, and I’m not even going to worry about making the payments. What happened to responsibility? You gain it from respecting the dangers that exist when questionable decisions are made. Without it, we’re setting ourselves up for another bubble somewhere else.
But… on the other hand, just to show that yes- I too am a hypocrite and fully willing to slop my way up to the trough, perhaps if everyone whines and complains about their taxes, then the convention of continuously seeking efforts to inflate property values will reverse itself. Since EVERYONE will want their property to be worth LESS, then of course all of these changes will be reflected in the data, hence showing a drop in the median price of homes, therefor eroding the myth that RE only goes up and thus helping to alter buying psychology, which in turn means lower prices for houses. Since that naturally benefits me, then of course I fully endorse it. So please- go out and tell your local tax authority that your home is now worth less and that you DEMAND to have your property taxes lowered. It’ll only do we who are waiting for those prices to fall that much quicker.
One last thing- where do you think taxes for schools, roads, and state employees comes from? Some of it comes from property tax. So you might want to think about that for just a second seeing as how the state barely functions as is.
Comment by edvard — April 4, 2008 @ 8:13 am
If a family is on Section 8, they probably aren’t facing foreclosure, maybe they are being evicted because the house they live in is being foreclosed on, but Section 8 is a rental subsidy, not something that has anything to do with owning a home.
Comment by Lauren Do — April 4, 2008 @ 8:28 am
Dan Walters commentary from Sacramento Bee on declining property taxes and how P13 makes California different:
California may be the epicenter of the housing industry’s meltdown, but very few areas of the nation are exempt from its effects.
As the housing market flattens out, or declines, one of the ancillary effects is to freeze, or even reduce, revenues to schools and local governments from property taxes. And throughout the nation, local officials are countering the revenue impact by raising property tax rates, as a recent article in the Wall Street Journal reported.
The Journal noted that Memphis, Tenn., is raising city property tax rates by 17 percent to offset declining property values and close a serious budget gap. “Everyone is feeling this pinch, and we are not immune,” Memphis Mayor Willie Herenton told his city council.
It’s happening in Memphis and thousands of other communities, but not in California, thanks to Proposition 13, enacted by the state’s voters 30 years ago. Proposition 13 limited property taxes to 1 percent of assessed value (plus bond debt) and also allowed values to rise by 2 percent a year – unless the housing market doesn’t support the 2 percent increase.
Property owners can ask for downward adjustments under another ballot measure passed by voters. But in most counties, assessors are automatically reviewing the housing market, neighborhood by neighborhood, this year and reducing taxable values as warranted. Ken Stieger, Sacramento County’s assessor and president of the California Assessors’ Association, likens it to what happened when the state was afflicted by a major recession in the early 1990s.
Comment by Mike McMahon — April 29, 2008 @ 11:11 am