I know this is an old thread.Thanks to EconProf. for bringing this up every year and for Bearish girl’s frequent helpful forum comments and PM’s on the topic.

It’s is appeal time again. Just follow the Prof’s instructions if you have not done this before. Everything needed for the application for a lowered assessed value is online. I know most areas have not dropped in the last year but we are still talking about Jan of 2012 values.Maybe some people still have not filed since values dropped?

I finished my first appeal(2011) and the assessor agreed on a value for 2012 also, so I won’t have to appeal this year. It took a while to get over valued because I built two houses and a detached garage on land that was purchased very inexpensively. Every time something got built the assessment would go up. I over paid property taxes for a few years though.

The point EconProf made about leveraging the assessor against going to a hearing is spot on.It seems the assessor’s appraiser also tries to use tax payer inertia in the same way.Don’t fall for it if you think you can make a fairly decent argument for a lower comps.

The appraiser initially didn’t agree to what I asked for. I gave good arguments and DATA and they lowered it to what I was asking and lowered the next year by an additional 8% based on our discussion of how hard hit my area continued to be in 2012.(if it keeps going soon we will pay no taxes).

I took up the argument by email, which they don’t seem to want to respond to, but usually is nonetheless effective. I followed up phone calls with emails even though they wouldn’t acknowledge them.Not sure if this helped, but I know they got them and read them based on later phone conversations. I always try to get an email chain going in any dispute.

My opinion is that the system leans towards overcharging of taxes in several ways. Every year, even after I was done building and while the market was still falling, my assessment went up(which is bullshit). In the future I will file an appeal any time my bill goes up even 1% more than the market does and I will request a larger chunk off than is realistic as a negotiating starting point….only because the assessors office seems to have proved to me, that otherwise, you start off in the hole.

Should they add the %2(or any percent) in seriously falling markets year after year?

What does prop 13 have to address assessments in falling markets. What does the State Board of Equalization have to say about the practice of raising assessments in falling markets? These are some questions that came up after looking at my tax bills while going through the appeal.

Yes, it was funny to belittle my property to the assessor’s appraiser…My wife and I were laughing about it.

I filed appeals in the 1990’s.

You can appeal down to comparable market value in a falling market.

In a rising market, the Assessor can adjust upward to market value, not to exceed assessed value when you purchased the property (generally purchase price), plus 2% compounded annually since. if the market is rising but not fully recovered from the peak, then your assessment might something lower than the maximum, unless you purchased before the runup.

What you owe on the property due to refinance has no bearing on the assessment.

if your build and improved the property over time, the formula is more complicated.

[quote=briansd1]I filed appeals in the 1990’s.

You can appeal down to comparable market value in a falling market.

In a rising market, the Assessor can adjust upward to market value, not to exceed assessed value when you purchased the property (generally purchase price), plus 2% compounded annually since. if the market is rising but not fully recovered from the peak, then your assessment might something lower than the maximum, unless you purchased before the runup.

What you owe on the property due to refinance has no bearing on the assessment.

if your build and improved the property over time, the formula is more complicated.[/quote]

I was only asking if the assessor is really in compliance when raising the assessment in obviously falling markets?

[quote=Blogstar]Should they add the %2(or any percent) in seriously falling markets year after year?

What does prop 13 have to address assessments in falling markets. What does the State Board of Equalization have to say about the practice of raising assessments in falling markets? These are some questions that came up after looking at my tax bills while going through the appeal.[/quote]

Rus, CA Proposition 8 (not to be confused with Prop 8 – the more recently-passed gay marriage ban) obligates county assessors to look at values at the beginning of a calendar year to determine if they have actually risen 2%. Of course, in times of presumed appreciation, they do this via a “cursory check” by parcel map (most of which are HUGE, btw).

How does the proposition work?

When the market value of a property on the January 1 lien date falls below the factored base year value (assessed value), the assessor is obligated to review the property and enroll the lesser of the factored base year value or market value. The factored base year value of real property is the market value as established in 1975 or as established when the property last changed ownership or when the property was newly constructed.

A property that has been reassessed under Proposition 8 is then reviewed annually to determine its lien date value. The assessed value of a property with a Proposition 8 value in place may increase each lien date (January 1) by more than the standard two percent maximum allowed for properties assessed under Proposition 13; however, unless there is a change in ownership or new construction, a property’s assessed value can never increase above its factored Proposition 13 base year value after adjusting for the annual increase.

http://www.boe.ca.gov/proptaxes/faqs/prop8.htm#2

I’m glad to hear you were able to get a good settlement out of the assessor, Rus! I don’t know exactly what you bought but would guess that when you actually bought your parcel, there were decrepit and/or makeshift utilities brought up to it’s possibly barely habitable? dwelling and so it was assessed very low. When you eventually had to draw permits for everything, of course the assessor got wind of it through the Dept of Planning and Land Use. Your parcel was then reassessed at or near “boomtime” values and so was eligible for a large reduction in assessed value today but you had to formally ask for it and go through the motions.

I am cognizant that the values of many areas of the county, even those with hundreds of “luxury” properties, simply crashed in 2008 and beyond. This crash in value doesn’t make them any less desirable to live in (unless there are MANY unkempt foreclosed vacant properties within very close proximity). In your case, if there WERE a lot of distressed properties in your area, it is harder to tell from the road and adjoining properties, due to setbacks, lot elevations and less proximity to the neighbors. Bonita and Jamul come to mind here. Most of BOTH of these areas are absolutely fabulous (and private) to live in and are only 12-24 miles from dtn SD! I believe their values “crashed” deeper than other locations with less desirable houses and lots for three reasons. 1) because they both are a bit of a commute from major job centers and thus are full of retirees and work-from-home types; 2) Bonita is now surrounded by “competing” SFRs built since 2001 on smaller lots and encumbered by HOAs (with the vast majority encumbered by MR, as well); and, many Mexican nationals bought in Bonita and Jamul with “funny money” during the millenium boom (these locations have easy access to MX). And no, we’re not talking about “drug lords and middlemen/women” here. They were simply individuals without a SSN and US credit report who had a downpayment but couldn’t qualify for a mtg under a normal underwriting environment. When these Mexican potential buyers saw the type of property they could actually buy (large house on sprawling lot) within 10 miles of the US/MX border (to accommodate visiting family members from MX), they jumped at the chance to pay too much and didn’t understand their mortgages due to language barriers. When their payments began resetting, virtually all of them lost their properties to foreclosure (mostly in 2009).

In recent years, flipper teams and DIY people like Rus have come in and rehabbed the vast majority of these properties (often VERY quickly) and the flippers resold them for a $100K++ profit. IMHO, what the flippers are doing, in essence, is a community service which will eventually lift all boats.

It may take a few more years, but I feel values can only go up from here :=)

[quote=Blogstar][quote=briansd1][quote=Blogstar]
I was only asking if the assessor is really in compliance when raising the assessment in obviously falling markets?[/quote]

Yes I believe they are on the properties with low assessment purchased a long time ago.

But I think their IT system is old so they sometimes forget.[/quote]

That’s a good point about the long ago purchases. I can see that as being reasonable.

In my case,the property gradually went into over assessed territory in 2008/2009 due to construction valuation increases without adjustments for the falling market.Then they kept adding value to the assessment in a falling market 2010,2011,2012. Could just be a glitch, as you say…but it did work out in the tax collector’s favor. I may want to go back and talk to them about it in case it would be beneficial to have the historical high assessment valuation changed…or something like that.

Thanks for letting me sound it out.[/quote]

Actually, brian, in some parts of the county, a property owner could have purchased as early as late 2000 and STILL received an assessment for FY 08/09 and later that is too high.

This happened to me, because, even though there are dozens of “luxury” properties situated on large lots close by (urban ChulaV), not very many of them “turned over.” What DID turn over were the many <1200 sf older 1-4 unit properties investors bought up for rentals during the millenium boom. These (tidy but numerous) properties are mixed in with hundreds of larger remodeled owner-occupied homes (like mine). When their easy-qual mortgages reset, these investors stopped paying their mortgages and in most cases, collected rent for as long as they could before succumbing to foreclosure.

Even though the bulk of these formerly "distressed" properties were not in any way comparable to their surrounding (mostly very well-maintained) owner-occupied homes, their recent sold-comps were so numerous that they had the effect of decimating the values of ALL surrounding properties.

In Chula Vista, there is also a problem (not yet completely resolved) of competing listings for *newer* SFRs (w/ small-lots and heavily encumbered with HOA/MR) located in adjacent zip codes (6-12 mi away) which, in the last few years, due to massive distress, have been selling for 50-85% off their original (sold as new) prices. I believe that, even with the additional heavy encumbrances, these *newer* areas are siphoning off younger would-be buyers from the established South County communities, where even ten years ago, there would not have been all these buying choices.

[quote=briansd1]I filed appeals in the 1990’s.

You can appeal down to comparable market value in a falling market.

In a rising market, the Assessor can adjust upward to market value, not to exceed assessed value when you purchased the property (generally purchase price), plus 2% compounded annually since. if the market is rising but not fully recovered from the peak, then your assessment might something lower than the maximum, unless you purchased before the runup.

What you owe on the property due to refinance has no bearing on the assessment.

if your build and improved the property over time, the formula is more complicated.[/quote]

Yes, brian, I appealed in 1994 as well and received about a $48K reduction in assessed value. But by the time our ’98/99 FY tax bill had arrived, the assessor had jacked our assessment back up to within 6K of the appealed value. At that point, there was nothing we could do about it.

Prop 8 allows them to assess higher or lower and also to “restore” an appealed value in just one tax year if market conditions dictate that it is warranted. Of course, these types of adjustments can, and most often do, exceed the 2% allowed by Prop 13.