Is Your Taxable Property Value Too High?
LOCAL GOVERNMENT, SHASTA COUNTY, SHORT SALES, TIPS FOR SELLERS
January 21st, 2010
Proposition 8 requires county assessors review property values used to calculate property tax bills when the current value drops below the base year valuation. Some California assessors have waited for property owners to request a new appraisal while others, including our elected assessor Leslie Morgan, have taken the initiative to examine thousands of properties purchased after 2002. Leslie Morgan and members of her staff updated Realtors on actions taken by their department to bring area property values in line with the current market at our weekly MLS meeting.
More than 32,000 of Shasta County’s 95,000 properties were reviewed and approximately 16,400 saw a drop in their taxable value. In fact, Shasta County property owners collectively paid $12.5 million less in property taxes as a result of Leslie’s actions. This translates to billions of dollars of lost property values across the county. Sacramento feels the hurt because they keep the lion’s share of property tax dollars that are collected by the county and forwarded to the state’s general fund. Only 13 cents of each tax dollar is returned to the county.
The challenge for county appraisers is selecting from two distinct pools of sales data-arms length transactions involving owner occupied, well-maintained properties or distress sales which include neglected bank-owned properties and short sales. Referred to as two-tiered market comparables, the appraisers must decide which pool to draw sales data from when conducting a reappraisal.
The county also received more than 500 appeals from property owners contesting the value of their property as reflected on the tax roll. This usually happens when the tax bills are mailed out each fall. Less than half of these properties were adjusted downward according to Leslie. Appeals are accepted after the tax year begins July 1 but the appraisal must reflect the value as of January 1 of the current year.
Another challenge is the lack of closed sales to choose from. The slow real estate market means there are fewer properties in a given location to use for an appraisal. This is an even greater challenge in rural areas of Shasta County. In some cases, the appraisers are so buried with a backlog of properties to evaluate they encourage property owners to file a formal appeal to protect their rights to have their property reassessed. This way they can have the value adjusted at a later date and receive a refund if there was an overpayment of property taxes.
One positive note is the inflation rate was negative for 2009 so the county will not be adjusting property tax bills upward this tax year. Prop 13 allows up to 2%/year increase if the CPI has increased by at least that amount.
Legislators are discussing possible revisions to Prop 13 in light of the spending problem in Sacramento. There is a push to split the tax roll-assessing commercial properties differently than residential properties. If this happens, it would be one more reason for businesses to move out of California.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS REAL LIVING
CORNER OF COURT AND PLACER IN REDDING
MORE THAN A QUARTER CENTURY LOCAL SALES EXPERIENCE
