San Diego County property taxes to increase on most homes

By
Real Estate Agent with HomeSmart Realty West CalBRE #01458572

I return comment for comment.Way back when I was just a teenager -- 1978 -- the citizens of California passed an initiative that limits property taxes. The initiative was called Proposition 13 and limits property tax increases to no more than 2% per year.

The purpose was to prevent governments from taking advantage of real estate booms, like we had from ca. 2000-2005, to increase property taxes so high that people had to sell their homes in order to pay the taxes. Prior to Proposition 13, many retired elderly were caught in the vicious booms that basically took away their homes because they couldn't pay the taxes on their retirement salaries.

One significant problem with Proposition 13 is that in a time of real estate busts like that which is occurring right now, the government is not required to re-value your property for you to come up with a new tax basis. They can, and sometimes they do.

Spanish hacienda in Bonita, CaliforniaIf you bought your home in 2006 for $400,000 and have watched the value decline to $200,000, you might be getting a new tax bill on that $400,000 home that is 2% higher than last year's.

If you disagree with the assessed value on your home, you can ask the Assessment Appeals Board to re-value your home. Make sure you have good documentation about why you disagree with the assessed value, and what you think the assessed value should be.

You don't always win in front of the Assessment Appeals Board, but you'll never know if you don't ask.

For information on Property Tax Relief and the Application for Review of Assessment, contact the County Assessor at http://www.sdarcc.com or (619) 236-3771.

For information on Assessment Appeals, contact the Clerk of the Board at http://www.sdcounty.ca.gov/cob/aab/index.html or (619) 531-5600.

For more information from the San Diego County Tax Assessor, visit his web site.

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Rainmaker
254,306
Connie Goodrich
Keller Williams Realty - McKinney, TX
CRS ABR (McKinney Realtor)Texas

Interesting regarding the property taxes.  In our area you have a couple of chances to get your assessed value lowered - you can make an appointment with the an appraisal district appraiser to discuss and contest and if it is not lowered then you can go to the appeals board.  Also, the District will not look at foreclosed homes as a comparable sale.  Good information for your clients.  Once a year I send out a letter regarding the tax valuation, rules for contesting the taxes and a note to any of my clients and buyers of my listings stating if they feel their assessment is too high, as a courtesy to them I will be happy to provide information for them to contest their taxes.  It is a great touch to that sphere and a nice service.  Texas is a non-disclosure state so the sales price of homes are not readily available.  Good luck to you!

March 17, 2009 01:52 PM #1
Ambassador
1,308,399
Robert (Vegas Bob) Swetz
REALTY ONE GROUP - LAS VEGAS, NEVADA 702.443.7156 - Las Vegas, NV
Commercial & Residential Real Estate Agent

Jim - I don't understand how values of homes can go down and the taxes go up?

March 22, 2009 07:04 PM #2
Rainmaker
1,108,114
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

Hey, Robert -- Proposition 13 allows taxes to go up a maximum of 2% each year, no more. Unfortunately, taxes don't have to go down just because the value of the house goes down. That's because the value of the property often goes up much more than 2% each year. For example, say you bought a home for $500,000 in 2000 and the value increased to $1,000,000 at the end of 2005. The tax would not be 2% of $1,000,000, it would be 2% of $568,276.89. So even if the house has now fallen in value to a mere $750,000, the tax is not 2% of $750,000, it's 2% of $568,276.89. Now if the house has, indeed, fallen in value to $500,000, then the tax is still on $568,276.89, so one would appeal to have the house revalued to $500,000 and then pay 2% tax on that $500,000.

Welcome to California!

March 22, 2009 09:05 PM #3
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Jim Frimmer

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