I bet many of you right now are dreading opening the nice letter sent to you from the San Mateo County Tax Assessor. Of course, not only should you open it but it’s also time to write that painful check.
And when you look at what your home is assessed at, you are liable to wonder if it’s too high. Many more of you would be right considering the extraordinary decline in home prices in 2009 for both the coast and county. It’s too late to do anything about this year unless you took my advice last year, but you can certainly plan for the next tax year and keep more of your hard earned money.
What I’m referring to is a way to lower your property taxes on your real estate holdings. It’s officially called the “Decline in Value” Reassessment Application Form issued by the local tax assessors. It can be picked up either online (www.smcare.org) or by phone, (650) 363-4500. This form has been simplified over the years and is now just one page.
Basically, they are asking you what your home is worth and for supporting data. What you want to do is the exact opposite of what you’ve done in the past for refinances. Here you want to pick the worst comps of similar sized properties to justify a lower reassessment of your home’s property taxes. Your friendly Realtor will be happy to assist you with this task or you can find several consumer Web sites.
You may also want to include in your supporting data a copy of an article I wrote in the Review on Oct. 28, which has a chart showing Average Home Prices for both the coast and county from 2000 through 2009. This chart shows that prices are now even with those back in 2003. You can get a copy of this article from the Review’s archive section on its Web site or pick up a hard copy.
The county wants data from next January through March so that it will take effect for the 2010-2011 tax year. I know this is a long ways off, but as you’re getting ready to mail your tax bill now will make you want to do something.
After you’ve submitted this form go about your life because it may be months till someone from the county contacts you about your reassessment. If you disagree with them about value, you can request a formal hearing where you can present your case in person in front of a panel.
Its’ true that the tax assessor will lower your property taxes to the current market value you’ve agreed to. However once the market turns around, you will find that your normal tax assessment will go back to the amount it was with the annual 2 percent increases. So while you will get a break in lower assessed value for a few years, if you hold onto your home long enough, it will eventually get back to what it should be had you done nothing.
Every year the county uses some formula to calculate home values and adjusts your assessment based on that. Some people who previously requested this reassessment were surprised by the fact that this reduction was not permanent. When the tax was returned to the normal value plus increases, they got a big increase in their property taxes.
This isn’t just for homes but for condos, commercial property and raw land. These other types of real estate have fared far worse than homes so the savings can be significant.
You can also do this for real estate you own in other counties. You’ll have to contact the local tax assessor to find out what their deadline dates and procedures are. For these out of area properties, you definitely would be advised to get the assistance of a local Realtor.
Again, this is fairly easy to do and it only costs you the price of a postage stamp and a little time. There’s very little downside. The worst they can say is no and then you’re no worse off than you are today.
Steven Hyman is the broker and owner of Century 21 Sunset Properties. He can be reached at 726-6346 or at www.century21sunset.com