In recognition of the steep decline in real property market values, Assessor Larry Stone announced earlier today that his office has begun to proactively review nearly 200,000 residential properties to determine if they are eligible for a temporary reduction in assessed values.
The Assessor’s Office plans to review all transactions which occurred since January 1, 2000, to determine if the market value as of January 1, 2009, has fallen below the original assessed value (typically the purchase price). “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. While we plan to review properties with transactions dating back to 2000, most reductions will probably reflect purchase transactions which occurred from 2005 to 2008,” said Assessor Stone.
While the review has begun, property owners are urged to wait until the Assessor’s Office completes the review in late June and sends notification cards to all 460,000 property owners. Santa Clara County is one of only nine California counties that notify property owners of their assessed value, before their tax bill arrives in mid September. When the Assessor reviews a property he must look to the market value as of January 1, 2009. Since few transactions occur exactly on January 1 (the lien date), the law allows the Assessor to consider transactions no more than 90 days after January 1. The best thing taxpayers can do now is become informed about the value of properties similar to their own in their neighborhoods. This information will be helpful if they choose to dispute the value on their notification card.
The Assessor also cautioned taxpayers to be wary of solicitations promising reduced assessed values in exchange for a fee. “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. By soliciting taxpayers before the Assessor’s notification card is mailed, these companies are encouraging homeowners to pay a fee to apply for a reduction in their assessment, that they are likely to receive automatically from the Assessor’s Office in late June. “My best advice on hiring someone to help you appeal your assessed.
The Santa Clara County Assessor’s Office has a nearly 20-year track record of proactively evaluating and providing reductions to reflect the declining market place. 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,” said Stone. “While I rarely make predictions, I fully expect that the number of property owners receiving reductions will increase this year.”
When the market value of a property drops below the assessed value, Proposition 8, passed by voters in 1978, requires the assessor to “temporarily” reduce the assessed to reflect the low market value.
The Proposition 8 process is rather straightforward. 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 (typically, that is the purchase price). Most residential properties will be evaluated through the use of computer assisted analysis and detailed review by appraisers. A separate analysis is performed for residential properties within each of the county’s eleven high school districts to derive the level of reduction for properties in each jurisdiction. This analysis takes into account location and other relevant factors from thousands of recent transactions in the Assessor’s database. In addition, the office’s 70 appraisers will perform individual appraisals on commercial, industrial, custom homes or special properties which often require a site visit. “While taxpayers are certainly anxious to know their assessed value, we urge everyone to wait until they receive their notification cards in late June. Otherwise staff will be answering calls instead of reducing values,” said Stone.