The Santa Clara County Assessor
’s Office released more evidence Thursday that South County
houses are rapidly escalating in value and that things are looking
up for commercial property owners.
The Santa Clara County Assessor’s Office released more evidence Thursday that South County houses are rapidly escalating in value and that things are looking up for commercial property owners.
The number of Santa Clara County properties assessed this year at a value lower declined drastically. In total, there are 4,500 properties assessed at $9.5 billion less than last year’s valuation.
“It is good news and bad news,” County Assessor Larry Stone said. “For residential property owners, the market has clearly turned the corner. For commercial and industrial property owners, the worst appears to be over.”
While the market value of residential properties rose substantially over last year, the value of commercial and industrial properties remained essentially unchanged.
Three thousand of the 4,500 properties are residential lots, but the commercial property accounts for more than 90 percent of the temporary reduction in assessed value. Last year 23,000 residential lots were reduced due to declines in the marketplace and the total reduction was $10.6 billion. This year that number has dropped to less than 3,000.
In contrast the number of commercial properties receiving temporary property tax relief is expected to remain the same as last year at 1,500 properties. While improved compared to last year’s steep decline, it remains flat relative to the continued growth in the residential sector.
“The trend reflects slight increases in value in the apartment and hotel/motel sector, and minimal declines in the commercial and office sectors. The balance of income property types appears to be approximately the same as last year,” said Stone.
In Morgan Hill, there are 84 properties worth $69 million less than their assessment a year ago. In Gilroy, there are 64 properties devalued by more than $20 million.
Lowered assessments are based on declining values in certain sectors of the real estate market. The trade off for property owners is a lower tax bill. It also means local governments will receive less in property tax revenue.
Proposition 13 caps the annual upward tax adjustment at 2 percent a year, but once a property returns to a value above what was paid for it, the annual adjustment returns to a figure based on the purchase price, and not the temporary reduced assessment.
