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San Carlos Real Estate December 16, 2008

Reducing your property tax…or, maybe not?

by Chuck Gillooley

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(Special thanks to blog reader Kimberley S. for suggesting this topic…)

It’s pretty obvious how the recent decline in home values has benefited buyers who have been trying to get a home in this area.   Homes that were once out of reach are now suddenly affordable — it’s a buyer’s market, after all.  But while this has been a windfall for home buyers,  is there any sort of a “silver lining” in this for people who already own homes?   Possibly…

The passage of (the other) Proposition 8 years ago allows homeowners to apply for a reduction in their property taxes if the homeowner feels the market value of their home has fallen below the “assessed value” that is stated on their tax bill.   The San Mateo County Tax Assessor’s Office  actually offers an online form on their website that makes it easy to appeal your assessment:  Click here“Decline In Assessed Value” Application Form.   If the County agrees that your home has been assessed at more than it is worth, your next tax bill will be reduced accordingly.

Here are a few things to keep in mind…

  1.  If you’ve owned your home for more than 5 years, you probably won’t benefit from this.  Why?   When you purchased your home, the property tax assessment was reset at essentially the price you paid for your home.   Proposition 13 caps the increase in property tax assessment to a maximum of 2% per year, regardless of the appreciation of your home’s value.    So even though your home may have lost some value this past year, it’s very likely that in the time that you’ve owned your home it has increased in value at a much greater rate than 2% annually.  So you’re probably still “ahead of the curve” and your home is still worth more than the assessed value.   (It’s still worth researching, though.)
  2. If you are granted a reduction in your assessment, bear in mind that this reduction is temporary.  The Assessors office will automatically re-assess your home every January and adjust the taxes accordingly until such time that they catch up with the original assessment.
  3. Your new “Prop 8 Value” is not subject to the same restrictions as it would be under Proposition 13.  This means that the Assessor can increase your taxes by MORE than 2% each year until it matches the originally assessed value.  Once the Prop 8 value reaches the original assessed value, the rules of Prop 13 kick in once again.
  4. Be sure to consult a tax attorney or CPA to fully understand how these laws may impact you.  Everyone’s situation is unique.

So, the big question that I pose to San Carlos residents is…

Has anyone tried this yet?  Was it a success or failure?   

I have already heard of one case that was denied.  Let us know by posting a comment below!
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Comments 6
  • I applied about a month ago using the online form. I received letters from the county about a week ago saying that both of my san carlos properties were denied a reduction in assessed value. The properties were purchased in ’05 and ’07. I’m assuming I was denied becuase the value of the properties were determined on Jan 1 and most of the decline in value have occured this year. Thus, I’ll try again on Jan 2, ’09!

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  • We tried it and were denied. For current tax bills, they look at the value as of January 1, 2008, and the comps were higher then than they are now. Next summer when you file, they’ll look at January 1, 2009, so there’s more chance of success.

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  • Yep, we were denied as well. I called the Assessor’s office when I got the letter, and he explained the January 1, 2009 point as well. He told me they go back and forward 90 days from January 1, which means comps from October 1 2008 – March 31, 2009 are the ones to review. Property values will surely still be lower on March 31.

    It is better to wait until April 1 to reapply to take into account the comps from January – March 2009. The Assessor’s office will be looking at those dates, so you should too.

    He told me the only question next April will be “how much,” not “if” property values have declined.

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  • It seems to me, filing the form is a waste of time, I filed for the last 3 years and all denied and it even went up every year, it sucks! In fact, I never heard of anyone got their prop. tax reduce. Your kinda’ wondering if the Assessors ever watch or read any news. I almost want to use that third party Property Tax Reasessmnet services so I can get a reduction. But then I heard it was a scam. Anyway, hope this year we could finally get a reduction.

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  • I have submitted reassessments of my home over the past two years and have had reductions each time. The reductions I received were not exactly what I expected but it was better than having to pay the full amount. I recommend finding as many comps in the area before filing to create a stronger argument.

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  • Current url for the form is: http://www.smcare.org/assessor/homeownerresources/form_declineapp.asp

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