I-Team: Homeowners Could Be Paying Too Much Property Tax

Homeowners Have 2 Chances In 1 Year To Ask For Reduction In Property Assessment

Carlsbad homeowner Ray Pearson suspected his property tax bill was too high. In his neighborhood, the market values were going down.

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"I couldn't sell this house for what I bought it for," said Pearson. "So why am I still paying the same property tax?"

Pearson's hunch was right, so he appealed the assessment of his home.

State law says if the market value of your home falls below what the assessor says your home is worth, then the assessment should be reduced. A lower assessment means a lower property tax.

"I think we went from $8,000 to about $7,500," said Pearson of his property tax bill. "That's a lot of gasoline."

10News asked Ernie Dronenburg, San Diego County Assessor/Recorder/County Clerk, how this kind of mistake happens in the first place. He explained that one reason why a home could be assessed too high is because of the inflationary factor required by state law.

"When the people made the constitutional amendment Proposition 13, they said that in California, you establish a base [value]. That's when you buy the house," explained Dronenburg. "Each year after that, it can go up two percent or the change in the California Consumer Price Index, whichever is less. And so a vast majority of properties in San Diego -- about 60 percent of them -- are subject to that escalator every year."

Assessors are required to keep a home's value current each year by applying the inflation rate to it. That annual adjustment is only capped at two percent if the home wasn't bought or sold, or had new construction added.

According to the assessor's office, in 2011, of the 911,530 homes in San Diego County that were assessed and taxed, 695,946 home assessments went up from the year before. Many of those were increased solely because of the inflation rate.

In a declining market, that inflation increase can sometimes push a home's assessment above its market value.

"Now the law also says we can drop [assessment] values if they're over market value," said Dronenburg.

When asked if the assessor's office or the homeowner is responsible for making sure assessments are not above market value, Dronenburg said, "The homeowner may take care of it, but we have proactively gone out and reduced over 200,000 values in the last three years."

Dronenburg admitted that they miss some.

"And that's why we're trying to make it easier for people to appeal," he said.

People like Ray Pearson, the homeowner in Carlsbad who was missed. He filed his own appeal by filling out the required form and submitting comparable sales. He was also prepared to argue his case before the Assessment Appeals Board, the group tasked with deciding disputes between taxpayers and the assessor. However, Pearson and the assessor came to an agreement before the hearing and his assessment was reduced $46,000.

"You would hope [the assessor] would do it automatically, but you have to be your own advocate in this market," said Pearson.

According to the assessor's office, 14,559 home assessment appeals were submitted last year.

Homeowners have two opportunities a year to ask for an assessment to be reduced if they believe it's too high -- a review and an appeal.

An assessment review can be requested online between Dec. 1 and April 30. This is essentially asking for a home assessment to be reduced before property tax bills are sent out later in the year. Homeowners will get an answer in July.

After the assessments have been determined for the year and property tax bills sent out, the only way to make a change is with an assessment appeal, which can be filed between approximately July and November. A final determination can take approximately a year.

The following resources are available to help you possibly reduce your property tax bill:

  • San Diego County Assessor Website
  • 2011 San Diego County Home Assessments
  • Find Comparable Sales From Assessor
  • How To Request Assessment Review (deadline this year April 30, 2012):
  • How To File Property Tax Assessment Appeal
  • State Board of Equalization FAQ's For Assessment Appeals
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