Property taxes too high?

By:
Eric Castongia
Broker Associate

Deadline coming up March 29, 2013 for informal review of property tax value

 

Although we have seen property values go up in the last year, there may be some people out there with valuations on their property taxes that are higher than what the property would currently be worth on the open market.  If you find yourself in this position, it may be possible to appeal your property tax valuation.

When values are going up, it is possible for your property value to increase much faster than your property tax value.  The flip side, is that if you bought at the height of the market, it’s possible, with the annual increases, to find yourself in the position of paying more in property taxes than you need to.

The amount of your property is based on the value of which you acquire the property, plus direct assessments such as Mello Roos or bond issues, plus allowable annual increases of two percent.  California Proposition 13 set this up system in 1978 to limit how much property taxes could increase.  Property values were rapidly rising at that time and there was fear that people would not be able to afford to stay in their homes as a result of increased property taxes.

There are two processes through the assessor’s office that would allow you to go through either an informal appeal process with a staff appraiser, or go through an assessment appeal with the Assessment Appeal Board.  The processes favor those people who had purchased property after 2003, since most properties acquired prior to that time would more than likely be properly assessed.

The deadline for going through the informal appeal is coming up (March 29, 2013), so you need to get cracking.  The appeal for the March deadline would be for the 2013-2014 tax year.  In this scenario, you would fill out an application and provide comparable sales (your real estate agent can help you with this) and/or an appraisal by a licensed real estate appraiser (I can give you some referrals-but an appraiser will probably cost you about $600).  Decisions for the informal review are supposed to be reached by the end of July.

It is possible to go through a dual appeal-doing both informal and formal processes.  The dates to appeal through the formal process through the appeals board  is July 2 to September 15th, 2013.  It’s important to realize that it the successful appeal is not a permanent reduction, so you will need to go through this process every year until the property value surpasses the value of your basis plus allowable increases.

To get the informal appeal process going, contact:

Assessor-Recorder, Attn: Informal Review, 1 Dr. Carlton B. Goodlett Pl., City Hall, Room 190, SF, CA 94102 .  phone number (415)554-5596; fax number (415)554-7915; email- InformalReviewRP@sfgov.org.

For the full Appeal Review Board, contact:

Assessment Appeals Board-Clerk of the Board, 1 Dr. Carlton B. Goodlett Pl., City Hall, Room 405, SF, CA 94102.  Phone number (415)554-6778, website www.sfgov.org/AAB Note there is a $60 filing fee.

The form the informal review I found on line was outdated.  I was able to get an updated form; here 2013-2014 Informal review

 

Side bar:

I realize that some people may not like or appreciate proposition 13, which limits the property tax valuation on California real estate.   This article is intended to give help to those who are paying MORE in tax than the value of their home, not to undervalue the home given it’s current value.

I know that an article, even those intended to give advise or direction, can be interpreted in a different way, or hit a sore spot if one has a contrary belief.  Please feel free to contact me  if you find yourself in this position; I am open to healthy discussion about a topic that you may find objectionable.