House Values in San Jose Decline. Should Your Property Taxes?

In 1978, the ballot initiative “People’s Initiative to Limit Property Taxation” was put in place by the voters of California.  This initiative basically restricted the increase in property taxes per year to 1% of value.   The result was a 57% cut in property taxes for California. This initiative also placed a high bar for change by requiring 2/3rds majority vote in local elections.  The origination of this initiative came from the belief that older citizens should not be priced out of their homes via ever increasing property taxes.  Valid argument.dreamstime_3946259

Some argue it has limited the housing market re-sale side (less inventory,high demand, pushing prices up),  has increased rents, and has created a demand for new construction on smaller and smaller amounts of available land.  It has been argued that not only do the long term residents benefit from a demand partially created by Proposition 13, but also benefit in services paid for by new home owner’s property tax rate.   There is not doubt that Proposition 13 has contributed to the affordability issue for new home owners in the Bay Area. There are many opinions about Proposition 13 and the debate heats up again and again.

Now, as home prices decline many home buyers that purchased homes after the year 2000 are asking why they are paying the same amount for property taxes.  My property tax bill actually increased this period in spite of losing $95,000 in equity from December 2007 to December 2008.   Therefore, I wanted to offer some resources to help those who have lost value on their property and have yet to see an adjustment on their tax bill.

Recently, Santa Clara County Tax Assessor indicated nearly 200,000 property tax bills would be reviewed to see which were eligible for a re-assessment.  This process is planned to be completed by June.  In the mean time, you can apply for an appeal via the Santa Clara Tax Assessor’s web site.  There are two ways to make an appeal.  You can make an informal appeal before August 15, 2009.  If the assessor does not agree you can apply for a formal appeal between July 2nd and September 15th. There is also a great down-loadable booklet from the Board of Equalization that can explain the process of appeal.  Click here for Frequently Asked Questions.

Be aware that recently many scams have popped up from companies wanting to charge you a fee to appeal your property taxes.  Some charge upward to $200 dollars. The Santa Clara Tax Assessor’s office charges a $30 application fee.  The application is pretty straight forward and takes just a little home work on the part of the home owner.

If you need help gathering information on the market, let me know. I offer a complete market analysis of your home, indicating recent sales data, photos, and a value range that can be used to support your appeal.  There is no charge for this service.  Contact me if you would like more information.

3 Replies

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  1. Hi CJ – This really is a great post and very important. This very same thing happen to my property…value down but property taxes up.

    I recently heard of a good strategy for homeowners interested in doing a little fact checking. Using public records data it is easy to uncover a similar homes assessed value. If you’re readers want to try, they can visit Cyberhomes.com. Start by searching your home, then look for the Tax and Sales data area. Once you have noted the value, scroll down further and look to the right for comparable properties. Click into matching properties to learn the related tax assessment. Repeat as necessary.

    Hope this helps!

  2. CJ Brasiel says:

    Reggie-

    Thanks for the tip. I use Cyberhomes quite frequently. How frequently does the sales data update?

  3. Hey CJ – Cyberhomes updates the valuations monthly, and adds approx 575,000 sales records monthly as they become available. 🙂

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