If Value declines, reassessment could cut tax bill

Typically, an application is required to initiate a review of a property’s value by the Los Angeles County Assessor. However, the Assessor’s Office says that this year it will be proactive in reviewing single-family homes and condominiums that were purchased between July 1, 2005, and June 30, 2007.

Just like news reports that overplay or totally misrepresent the local real estate market, the flyer that arrived in the mail was filled with an array of red flag warnings and, well, frankly, plenty of lies.

It  talked about foreclosures as if the sky were falling — yes, there are foreclosures in the San Fernando and Santa Clarita Valleys, but not as many as in other regions that had more new home activity. And, the number of local foreclosures do not appear to be enough to threaten the region's mature, healthy economy.

The flyer talked about plummeting resale values as if all homes held zero resale value — yes, prices are soft today depending on all the usual factors: price range, location, size, quality, comparable inventory and local demand. Resale prices had to level off and fall slightly after years of posting 20 percent plus increases. It was inevitable; in fact, lower prices are welcome because now more people can get into the market.

But for most homeowners, home resale prices remain well above what they paid for the property and there appears to be little on the horizon that could change that reality.

The family fortress may not be worth 20 percent more compared to last year, but it most certainly is not worth 20 percent less — any local decline is more in the range of 3 percent to 7 percent.

Yet if readers believed what was stated on the flyer, they needed to rush right out to get their property reassessed so that they could lower their annual property tax bill.

Here's the catch, the big lie — the flyer said the company would not charge anything until the property was reassessed. The fact is, homeowners can do it themselves without paying anyone a penny. All they have to do is complete an application form requesting that their property be reassessed. This year, the process is even easier as the Los Angeles County Assessor office says they will do it automatically.

How does a decline in value impact property taxes?

In 1978, California voters passed Proposition 8, a constitutional amendment that allows a temporary reduction in assessed value when a property suffers a “decline-in-value.”

A decline-in-value occurs when the current market value of a property is less than the assessed value as of Jan. 1.

While declines in Los Angeles County have not been as dramatic as those in other parts of the State, property values have dropped in some areas of Los Angeles County.
Typically, an application is required to initiate a review of a property’s value by the Los Angeles County Assessor.
However, the Assessor’s Office says that this year it will be proactive in reviewing single-family homes and condominiums that were purchased between July 1, 2005, and June 30, 2007.
The assessor will look at sales of comparable properties that sold near the lien date, Jan. 1, 2008. If the market value is less than the assessed value indicated on an owner's 2007-08 tax bill, the assessed value will be reduced accordingly. An application will not be necessary.
The assessor's office says it will complete this review by June 1 and will notify in writing those property owners who qualify for a reduction in the assessed value of their property.
Applications will be accepted prior to June 1, but if a home was purchased between July 1, 2005, and June 30, 2007, the assessor urges owners  to wait for notification before filing. Should it be necessary, owners will have until Dec. 31, 2008, to file an application for review.
If the sale date of a property is not within the dates noted or is other than a single-family home or condominium, it will not be included in the review.
However, if an owner believes the assessed value of the property shown on the 2007-08 tax bill is more than the fair market value as of Jan. 1, 2008, the owner may file an application at any time through Dec. 31, 2008.
In short, wait for the assessor to act or do it yourself, but do not pay any amount to anybody for starting a property tax reassessment process that can be done easily and for free.