Editor’s note: The Santa Clara County Assessor’s Office released
a report today stating 475,296 assessment notification letters
which detail each property’s assessed value as of January 1, 2011
will be mailed Friday to property owners. Each notice serves as the
basis for the calculation of property taxes. The Gilroy Dispatch
has provided below the release in its entirety which has not been
edited for grammar or content.
Editor’s note: The Santa Clara County Assessor’s Office released a report today stating 475,296 assessment notification letters which detail each property’s assessed value as of January 1, 2011 will be mailed Friday to property owners. Each notice serves as the basis for the calculation of property taxes. The Gilroy Dispatch has provided below the release in its entirety which has not been edited for grammar or content.
Assessor Mails 475,296 Annual Assessment Notification Letters
The value of one quarter of all properties is below their purchase price
On Friday, the Assessor’s Office will mail 475,296 Assessment Notification letters which detail each property’s assessed value as of January 1, 2011 (lien date). Each notice serves as the basis for the calculation of property taxes contained in the property tax bill to be mailed in September. The overall number of properties assessed below their purchase price increased five percent to 124,148. The total reduction in assessed value of these properties increased thirteen percent to $27 billion. All reductions were assessed proactively by the Assessor without a single taxpayer request. Twenty-seven percent of all single family homes, and forty-nine percent of all condominiums are assessed below their purchase price, primarily due to the collapse of the residential real estate market.
“Basically, it means our economy has not yet recovered, due to the record level of distressed sales or foreclosures,” said County Assessor Larry Stone. “To the extent there is any good news for homeowners, it is that the slope of the decline is less severe, and some communities are beginning to turn the corner.” For seven percent of residential properties in which the assessed value was previously reduced, the market has improved to where the value now exceeds their purchase price. In these cases, the Assessor is required by Proposition 8, passed by voters in November 1978, to restore the assessed value to reflect improving residential market.
“The fact that the assessed values of some properties are being restored and others are reduced, can be very confusing for property owners. Most property owners assume that according to Proposition 13, the assessed value of a property can increase no more than two percent annually. That is not entirely true,” said Stone. When the market value of a property declines below the previously established assessed value as of January 1 each year (lien date), the Assessor is required to reduce the assessed value to reflect the lower market value. However, when the real estate market recovers, the Assessor is required to “restore” the assessed value consistent with the market. Proposition 8 provides that property owners are entitled to the “lower” of the fair market value of their property as of January 1, 2011, or the assessed value determined at the time of purchase or construction, and increased annually by either two percent or the annual California Consumer Price Index (CCPI), whichever is lower. This year the CCPI is 0.753 percent.
The assessed value of 45,773 residential properties will be increased to reflect market improvement. In addition, the assessed value of 75,271 properties remain either unchanged or declined further, reflecting continued deterioration of property values in some geographic areas of the County.
To the extent there are any trends, they appear to be geographically and value based. Lower priced, entry level housing, particularly in lower income communities which experienced the biggest decline during the past three years, actually saw fewer properties in a decline status. While counterintuitive, this circumstance is the result of either foreclosures or distressed sales by property owners in default. As properties move from foreclosure to acquisition by new owners or investors, they are reassessed, albeit usually at a far lower value.
For the first time, home values in some high income areas experienced a steeper rate of decline compared to the previous year. For example, last year in Los Altos Hills 342 properties were assessed below their purchase price for a total reduction of $320 million. This year, the assessed value of 471 properties was reduced and the total amount of reduction jumped to $1.4 billion.
The Assessor’s Office also reduced the value of 1,954 commercial and industrial properties in response to the declining market totaling $6 billion. “Recent signs of recovery in the office and commercial sectors, particularly in the northern portions of the County, may not be reflected until next year as the Assessor’s Office must establish the market value as of January 1, 2011,” said Stone.
COMPARABLE VALUES – HOW DOES THE ASSESSOR DETERMINE MARKET VALUE
Santa Clara County is one of only nine California counties that formally notify all property owners of their assessed value three months before the tax bill is mailed. The Assessor’s Office offers an on-line, interactive tool to provide comparable market data to the more than 336,000 homeowners receiving a temporary reduction or change to their 2011 assessment. In the past, detailed comparable market information was not readily available. “By providing the sales price of comparable properties used to establish the assessment, property owners can better understand the basis of their assessed value,” said Stone.
The assessment notice will include a PIN number enabling 336,000 property owners to access relevant market data 24-7. The PIN number is secured and available only to the property owner. Sales prices of two or three similar residential properties, sold between July 2010 and March 2011 are provided. Foreclosures and other properties not transferred on the open market between a willing buyer to a willing seller, are not included. Essential characteristics of the comparable properties such as the square footage of the home (garage not included), number of bedrooms and bathrooms and the distance from the inquiring taxpayer’s property are displayed.
The on-line tool utilizes new assessment technology implemented and managed by the Assessor’s staff. The technology’s underlying methodology relies primarily upon similar properties, such as tract homes and condominiums, where a sufficient number of recent transactions are available.
WHAT PROPERTY OWNERS CAN DO IF THEY DISAGREE WITH THEIR ASSESSMENT
Property owners who did not receive a reduction in their assessment and believe that the market value of their property, as of January 1, 2011, is less than the value shown in the notification letter, can request, via the assessor’s website, an informal review up to August 1. Property owners will be asked to substantiate their opinion of value by providing market information of comparable properties as of January 1, not the market value at the time the notification is received.
If a value reduction is appropriate as determined by the Assessor prior to August 15, 2011, the assessed value will be changed, and the revised assessment will be reflected on the property tax bill. Depending upon the number of requests received for informal review, the Assessor may not have sufficient staff resources, to complete all informal reviews by the August 1 deadline. A separate letter will be sent with the results of the review or if the Assessor was unable to complete a review. Property owners that disagree with the Assessor’s opinion of value, should file an Application for Changed Assessment (appeal) with the Clerk of the Board by the September 15 filing deadline.
A detailed PowerPoint presentation to assist taxpayers in understanding the legal basis for temporary assessed value reductions and to determine their eligibility is available on the website at www.sccassessor.org/prop8. Property owners can also contact the Assessor’s Office with questions at (408) 299-5300, or by email to **@********ov.org.
Stone encourages property owners who have requested a review, but have not received a written response by August 20, to consider filing a formal assessment appeal by the September 15 deadline. Assessment appeals are heard, within two years, by an independent, quasi-judicial Assessment Appeals Board comprised of real estate professionals appointed by the Board of Supervisors. On June 20, the Board of Supervisor’s increased the fee to file an appeal to $35.
This year for the first time, residential property owners may elect to have their appeal “fast tracked” and resolved by a residential Value Hearing Officer, rather than the traditional three-member Assessment Appeals Board. Advantages include a less formal hearing process and an expedited resolution. “If a property owner disagrees with their assessed value, please do not wait for the tax bill, as it will be mailed after the assessment appeal filing deadline.” said Stone. More information is available from the Clerk of the Board by calling (408) 299-5001 or going to their website, http://www.sccgov/portal/site/cob.
NEW FEATURES
Building upon last year’s fundamental overhaul of the underlying technology used to assist the Assessor determine market values, the Assessor has made many additional changes to improve customer service. Some of the major changes include:
· a simpler, easier to navigate website
· added valuation parameters to increase the accuracy of the on-line appraisal; new parameters include a property’s proximity to a potentially value reducing major road
· a new, more readable layout of the comparable appraisal
· the use of a Quick Response (QR) code for our most technology savvy taxpayers
In addition, much like many commercial establishments, the Assessor’s Office is actively moving toward a completely electronic and highly secure process for taxpayers to interact with the office. In anticipation of this new functionality, the Assessor’s Office is requesting taxpayers to confidentially provide their email address by going to the Assessor’s website. “When launched, this feature will offer an easy to use electronic option for accessing assessment information and notices. It will truly put us on the cutting edge of providing exceptional customer service. Everyone benefits from reduced postage costs as well as the reduced environmental impact of traditional paper correspondence,” said Stone. At the time this application is launched taxpayers will need the PIN number and APN contained in their Notification Letter and are urged to hold onto this information.
All the data contained in this release reflect preliminary information. The final assessment data will be available shortly after final close of the assessment roll on July 1, 2011.
Attached are four charts showing geographically where Proposition 8 relief has been provided in Santa Clara County. A two page generic sample of the notification letter sent to a majority of property owners is attached; however the content of the letters will vary according to a property’s unique set of circumstances.
David K. Ginsborg
Deputy to the Assessor
Office of the Assessor, Lawrence E. Stone
5th Floor, East Wing
70 West Hedding San Jose, CA 95110
Web: www.sccassessor.org
