Assessor Says Property Declines Not as Great as Some Think
There may be some misinformation being disseminated about the decline in property values and the resultant potential tax savings to real property owners, according to Assessor-County Clerk-Recorder Larry Ward.
Ward notes that Proposition 8, passed by California voters in 1978, allows a temporary reduction in assessed value when the current market value of your property is less than the current assessed value. (Prop 8 was an amendment to Proposition 13.)
As of January 1 of this year, property values had declined to market values of January 2004. It’s not to difficult to figure that you ought to be eligible for a “decline in value” reconfiguring of your tax obligation if you bought subsequent to January 2004, but if you bought the property earlier than 2004, its current market value is still higher than it was when you purchased it. In other words, you’re not off the hook.
The picture is complicated slightly by the fact that Prop 13 allows for an annual increase in value of 2 percent. Should the market continue to decline, however, then the Assessor may be comparing property values to 2003 or even 2002, making more homeowners eligible for reassessments.
Ward reported recently, however, that the assessed value of all locally taxable property in Riverside County has increased $3.47 billion over the previous year to a total assessment roll value of $242.98 billion, a 1.45% increase. This assessed value represents the valuation of 675,135 residential properties, 40,770 commercial, 34,145 business personal property and 64,683 manufactured home assessments.
The provisions of Proposition 13 govern assessment roll values where the base year value of individual properties is reappraised when either new construction or a change in ownership occurs. Properties that have not had either new construction or a change in ownership will increase for the 2008-09 year by the 2% inflation factor as provided by Proposition 13.
In fiscal year 2008-09 the Assessor reappraised over 80,000 properties that changed ownership and over 17,000 completed homes. This assessment activity added over $18 billion dollars to the assessment roll but was offset by the dramatic decline in current residential values.
The decline in the housing market has dramatically affected assessments for the 2008-09 assessment roll. The Assessor has been proactive in reducing values on properties that have declined below their Proposition 13 base year value. “Over 270,000 properties have been reviewed for reduced assessment”, stated Ward, “and over 200,000 of those reviewed were reduced”.
If the current market value of a property as of January 1, 2008 declines below its established base year assessed value then the assessment will be reduced to the lower value for this fiscal year. That property will then be reviewed each January 1 and as the market value increases, the assessed value will be adjusted annually until it returns to the factored base year value.
The Assessor began sending valuation notice letters to property owners in early July identifying the 2008-09 assessed value. These notices will reflect the values that will be on the property tax bills received in the Fall. The value notice letters will indicate those properties that have been reduced and also those that have been reviewed but not reduced. Property owners who disagree with their values and who can support a lower value may file a decline in value application with the Assessor’s Office by September 1 or file a formal assessment appeal application with the Clerk of the Board between now and November 30, 2008. The application forms are available on the Assessor’s web site at www.riversideacr.com or www.riversidetaxinfo.com .