Property Tax Bills Increase This Year? For those of us who received reassessment during home price decline
For those of us who were given a lower property value assessment during the crash/home price decline years our jig may be up. My house in Encinitas that was assessed in the $700,000’s was reviewed and reassessed to $600,000 as were most others in my 37 home development. That has been a saving of approximately $1600/yr that may be going away….Price to pay for 2.5 years of large percentage gains…?
-Paul
http://www.utsandiego.com/news/2014/may/07/property-tax-real-estate-mortgages-housing/
More than 200,000 property owners in San Diego County could see their property tax bill rise between 10 and 20 percent this year, a new state report says.
Those owners have been receiving a break on their property tax bills since housing values plummeted during the Great Recession and were reassessed downward. Now, as values have recovered, tax bills can do the same.
“Nobody likes when their taxes go up but in this case taxes are going back up to where they would have been,†said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. “They got a break, that’s over with, and so it’s unfortunate but the rules are the rules.â€
In tax year 2014-15, which starts July 1, property tax bills could go up dramatically because county home values increased 17.1 percent in the 12 months leading to Jan. 1, 2014, the date on which values are assessed. There is no cap on how much a property’s assessed value can recover each year if it was reduced during an economic downturn, the report from the state Legislative Analyst’s Office says.
n the current tax year, 2013-14, there are 275,083 properties in San Diego County receiving the break, all but 60,000 of which are residential. That accounts for 28 percent of all properties in the region. At the same time, discounts ended for 62,000 property owners as home values rose 3.2 percent from Jan. 1, 2012 to Jan. 1, 2013.
The more than fivefold increase in home-price appreciation through Jan. 1, 2014, should mean that even more people can expect their property tax bills to reach their pre-reduction levels. For its appreciation calculation, the state uses federal data on repeat sales of single-family homes, much like the closely-watched S&P/Case-Shiller Home Price Index.
“As far as catching up goes, it’s entirely market driven,†said Jeff Olson, division chief of assessment services at the San Diego County Assessor’s office. Olson said the state projection of 10 to 20 percent increases is reasonable, although some owners could see a property tax increase less of than 10 percent, while others could see their bill rise more than 20 percent. Final numbers should be out in mid-June, taxpayers will be notified of the change in valuation in July, and bills are sent out in September.
The rules for determining how much an owner pays in property taxes have been in place since 1978, when California voters passed Propositions 8 and 13.
Prop. 13 rolled back property assessments and then limited annual inflation increases to no more than 2 percent. The measure also capped taxes at no more than 1 percent of assessed valuation, based on the most recent sales price plus the annual inflation factor. Meanwhile, Prop. 8 mandated that if market values drop below assessments — as they did during the Great Recession — the county assessor must reduce the assessments and adjust them annually, depending on market conditions. There is no 2 percent cap on annual upward readjustments, back to the Prop. 13 maximum.
Property taxes remain a major source of revenue for local governments, including counties, cities, school and community college districts and special districts. If a school district doesn’t receive enough money, the state has to supplement it from the general fund, the Legislative Analyst’s Office report says. The state collected an estimated $52 billion in property tax revenue in tax year 2013-14.
Statewide, 3.2 million owners received the benefit of Prop. 8 as their property values plummeted during the economic downturn. In 2013-14, the average California homeowner received a $1,600 property tax reduction, and the average commercial property owner saved $7,500 statewide. Local figures were not available.
“Proposition 8 properties were sort of an unknown component of the state’s property tax system,†said Chas Alamo, who authored the state report. “The recent recession was so significant and so many properties came under Prop. 8 that we decided to highlight it.â€
The median home price in San Diego County in December was $420,000, up from $350,000 a year earlier, DataQuick reports. So far this year, the county assessor has received 299 requests for assessment reviews, down from a peak 56,000 in 2009. The deadline to make the request has been extended to May 16. Properties that were reduced under Prop. 8 are automatically reassessed each year.