Understanding Propostion 8
Property Values Have Declined - Are You Paying More in Property Taxes Than Required ???
If you purchased a home in California in 2004, 2005, 2006, 2007 and gulp 2002, 2003 or 2008 you are most likely paying MORE in Property Taxes than required! You may qualify to have your property taxes reduced. Nationwide according to the latest Case-Shiller home index property values are back to where they where in 2003. We are likely back to 2001 in certain parts of California.
On average homeowners save over $1,054 in property tax reduction when filing under Proposition 8.
California property taxes are determined annually by the County assessor's office. The assessor's office uses the purchase price of the property and then is bound by Proposition 13 to raise the assessed value by a fixed percentage every year - about 2%. During the real estate boom, property values rose far more than 2% per year. Proposition 13 was passed to protect elderly homeowners from paying an exhorbitant amount in taxes. However, it has led to an unfair system of taxation whereby new homeowners pay an exceedingly higher amount than homeowners who have stayed in the same residence for many years.
Most Californian's however are unaware of Proposition 8. In 1978, California voters passed a constitutional amendment, Prop. 8 that allows for a temporary property tax reduction in assessed value when the property suffers a "decline-in-value." A decline-in-value occurs when the current market value of the property is less than the current assessed value as of January 1 of any given year. Each County in California has its own Assessor's office and each has its own process for claiming this decline in value.
YOU DO NOT AUTOMATICALLY RECEIVE THIS "DECLINE IN VALUE"!!! YOU DO AUTOMATICALLY RECEIVE THE PROPOSITION 13 INCREASE!!! YOU MUST TAKE ACTION TO HAVE YOUR PROPERTY TAXES REDUCED!!!
How to Obtain a Reduction in Property Taxes: You can file the necessary forms yourself for free and be prepared to do battle if necessary - the County Assessor's offices are swamped and quite frankly they do not have the necessary manpower or expertise to handle the influx of volume. Despite what they tell you - you owe it to yourself to fill out the form yourself. The forms can be found in our County section on the Navigation menu. You will need to justify the decrease in value. Some assessor offices allow you to use the valuation offered by sites such as www.zillow.com. Real estate agents or mortgage brokers can also provide you with these valuation reports.
Alternatively have a professional firm do it for you. Click on some of the sites advertising through Google below.
If the Google ads are not making sense - thanks Google: You can try a search here - try searching for lower california property tax and usually one of the paid ads should help you out.
You should find one that offers the option for a nominal fee (less than $50 or $60) that will give you the forms and supporting data you will need to file with your County. If you are having trouble getting the data you need contact us at support@lowercaliforniapropertytax.com and we can help you. We have a suggested donation of $35 for a professionally prepared CMA (comparative market analysis) which helps support our site and service - but we encourage you to do it yourself as it is all available for free.
While some Assessor's offices have tried to make this process as easy as possible, it is confusing, requires patience and also access to the latest market information. Be prepared to appeal if necessary.
Given the downturn in California real estate a property purchased in 2005 can expect a decline in value of about 30%. On a property that was purchased for $500,000 that amounts to a $150,000 decline in value. At a 1.3% property tax rate that works out to $1950 in the first year alone in property tax savings. Now is the time to take action as this reduction stays in place as long as values stay depressed. In other words, your action today will continue to generate savings for you as long as the market stays below the prices paid in the bubble years...
We urge you to fill out the forms with your County immediately to avoid missing deadlines as County Assessor offices get deluged by homeowners requesting their reassessment.
If you need even more information and education then try this e-Book - tell us if its useful to you... Click Here!
The same folks have a system to make you a Professional Tax Consultant for yourself -
