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REALTOR®: County Assessor tells REALTORS® to Warn Clients about Tax Reassessment Scams


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Wednesday, February 18, 2009

Declining property values in some areas have opened the door to tax reassessment scams which REALTORS® need to warn their clients about, according to Santa Clara County Assessor Larry Stone.
 
Stone, a guest speaker at the Silicon Valley Association of REALTORS® Palo Alto District tour meeting last week, said homeowners should be wary of solicitations from "bucket shops," firms that offer to provide homeowners property assessment information for a fee. These are scams, he told REALTORS®.

The latest money-making scheme involves official-looking letter entitled "Property Tax Reassessment" sent to homeowners, which charges as much as $179 dollars, and an additional $30 late fee, if they don't respond and send in the money by a due date.

"Please tell your clients there's no reason to pay for something that they will get from us for free," Stone said.

Homeowners should not to panic if they don't receive their notification cards in May. Stone one of 10 county assessors in the state who sends out assessment notification cards to homeowners early in the year, but he explained this year, due to his office's heavy workload, homeowners will not be receiving their notification cards until the last week in June, giving them less time to request a second review before the deadline of Aug. 15. Homeowners have between July 2 and September 15 to formally file an appeal.

In line with Proposition 8, Stone said his office last year proactively reduced the assessed value of about 46,000 properties in the county, which led to a total reduction of about $5.3 billion from the county's assessment rolls. Of properties whose assessments were reduced last year, 98 percent were residential, with an average reduction of $75,000 per property.

Proposition 8 requires the assessor to take into account any factor causing a decline in value of a property, and consequently reduce a property's value. When and if the market value of the previously reduced assessment increases above its Proposition 13 factored base year value, the assessor will once again enroll its Proposition 13 factored base year value. Stone said he doesn't expect this to happen in 2009. In fact, he expects more reductions this year.

"I expect we'll double the number of properties in Prop. 8 status to about 80,000, which could take between $8 to $10 billion dollars off the rolls," he indicated.

The county assessor said up until recently, the county's high-end markets of Palo Alto, Cupertino, Los Altos, Los Gatos, Saratoga and South Sunnyvale have held up in value because these are more established areas with excellent school districts, fewer condominiums, less new construction and fewer first-time home buyers.

"These higher end areas with excellent demand have reasonably weathered well until lately," Stone said.

On the other hand, the housing markets in Gilroy, Morgan Hill, Milpitas, East San Jose, Central San Jose continue to be "upside down."  Last year, almost 25 percent of condos and townhomes in the county, many located in these neighborhoods, were assessed below the purchase price. He expects that number to increase this year.

While fair market value is normally determined by willing buyers and sellers, these days there are so many short sales and foreclosures that they are beginning to set the market value in certain geographic areas.

"We can't ignore it," Stone stated.

Stone said REALTORS® also need to tell homeowners to be aware that the market value of a property has to drop below the assessed value before they can seek a property assessment reduction, and the time to take note of comps begins from the lien or valuation date, which is January 1.

REALTORS® likewise need to remind their clients even if they expect a property tax reduction, they still need to pay the tax due.

"Please tell your clients to pay their taxes on time. The tax collector is not the assessor. Even if they expect an adjustment, they need to pay their taxes because they will be subject to a penalty if they don't," Stone warned.

Despite the reduction in valuations, Stone said he believes Santa Clara County will still be among the top 10 in the state in assessment roll growth, which he projects will be at just 1-2 percent.

"Our assessment roll will not go negative, but we are going to see public services all over, in the county and cities, go down," Stone said.


The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.

The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.

Variations of this article have appeared in local area newspapers.

For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.

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