Property taxes too high?

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.

How to view a property

Now that you’ve established your budget, priorities and preferred neighborhoods, you’re ready to take a look at properties.

To actually get into the properties to look around, it’s usually more efficient to see several at a time-Sunday open houses or arranged appointments with your real estate agent are the norm. If you see a sign on a building that looks interesting, call or e-mail your real estate professional to get more information and find out if it’s available and within your budget.

At first, it’s probably worth taking some notes to remind your self about certain properties, so that you don’t forget.  It’s not uncommon to revisit properties at a later time-what you didn’t like initially may look better later on.

You’ll get good at weeding out the properties that work and don’t.  Once you’ve honed in on a few that look interesting, you’ll need to start doing your due diligence; looking at the disclosures and spending time in the neighborhood to see what pluses and minuses you may encounter.

It’s become commonplace in San Francisco for disclosures to be available for buyer review prior to writing a purchase offer.  This is good, in that you get to try to determine the negatives as well as the positives before you take that big step of writing an offer.  Hopefully a recent structural pest or general contractor’s report has been done for your review and consideration.

Make sure and look at neighborhood crime statistics through the police and Megan’s Law websites.  Here are a few places to look:

www.sfgov.org/site/police

www.meganslaw.ca.gov

www.crimereports.com

www.trulia.com/crime

Remember that no property is perfect, so focusing on the bigger picture of what the property contains and being willing to work through smaller issues will yield a lot more property options.

There is no right or wrong time to buy a property.  When a good property matching your needs comes up, especially if it’s a one of a kind, don’t be afraid to take the leap.  In any market, you should consider committing to holding a property for five years or more.

You should be open to finding a property very quickly.  I have had clients who found a property right away and did not move on it, only to regret it later.  Be clear on how unusual it is (will another property like this come up again), is it fairly priced, or an exceptional opportunity.  Conversely, you should expect your real estate professional to let you know if they feel a property selection is best avoided and why.