Property Taxes: California Property Owners Should Consider an Appeal

August 29, 2012, by Tamara B. Pow

As a business and real estate attorney in Santa Clara County, I have often heard our Tax Assessor, Larry Stone, talk about how hard his office is working to reappraise properties to make sure the property tax assessment roll is correct. However, I just spoke with a California homeowner who is close to losing her home and is being forced to list it for sale. As we spoke, I looked up her address online and found that her property taxes were based on a value far in excess of the amount her real estate agent has told her she should be able to sell for. This is costing her thousands of dollars per year in extra property taxes.

This conversation came at a time that my own property tax assessments from Santa Clara County have just arrived in the mail, reminding me that I need to reconsider the comparable sales in my area and decide whether it is time to contact the Assessor's Office with the information. When you get that yellow notice in the mail, do not ignore it. Take a close look at the information on the card and see if it is in line with what you think your property is worth. If it is not, you should call the Assessor's Office, provide them with any supporting documentation, and see if you can get the staff to agree with you. If they do not, in Santa Clara County you have until September 17, 2012 to file an appeal. Under Proposition 13, your base-year value (the value when you bought your property) can be increased by no more than 2% per year. However, if the market value has fallen below the adjusted base-year value as of a January 1st lien date, you can get a Proposition 8 assessment which is the lesser of the Prop. 13 adjusted base-year value or the market value. Keep in mind that once you get a Prop. 8 assessment, you are no longer limited to a 2% increase per year. If the value jumps up, your assessment can recover up to the Prop. 13 level at any time. For example, if you buy a home for fair market value of $1 million and the value goes up $50,000 immediately after you buy it, the assessment is limited to a 2% increase over the base-year value, or $1,020,000 (instead of $1,050,000). However, if the value of your property falls to $900,000 the following year, you can get a Prop. 8 assessment of $900,000. The following year, your assessment is not limited to $900,000 plus 2%, but can recover all the way up to the base-year plus 2% per year for each year since the purchase year.

During the appeal process, you must pay the assessed property taxes. Then, if you get the value reduced, you must actually call and ask for your refund check.

Santa Clara County includes the cities of Santa Clara, San Jose, Sunnyvale, Cupertino, Milpitas, Monte Sereno, Palo Alto, Mountain View, Los Altos, Los Altos Hills, Saratoga, Campbell, Los Gatos, Morgan Hill, and Gilroy.

For information on how to file an appeal, see the Board of Equalization website, there is a video to assist you available at www.boe.ca.gov/info/AssessmentVideo/AppealAssessmentIndex.html. To contact the Santa Clara County Assessor's Office, go to http://www.sccgov.org/sites/scc/Contacts/Pages/default.aspx.

The information appearing in this article does not constitute legal advice or opinion. Such advice and opinion are provided by the firm only upon engagement with respect to specific factual situations. Specific questions relating to this article should be addressed directly to the author.