South Valley property owners who own property that has declined
in value because of perchlorate contamination or the slumping
economy may qualify for a bit of relief: a property tax break.
South Valley property owners who own property that has declined in value because of perchlorate contamination or the slumping economy may qualify for a bit of relief: a property tax break.
In an attempt to get “ahead of the curve” on the issue of perchlorate and property values, County Assessor Larry Stone is urging South County residents who can document a thwarted sale or loan attempt in recent months because of the perchlorate issue to send that documentation to his office.
Due to a state proposition, the information could potentially drive some tax relief in certain circumstances where the market value of a property has plummeted below the assessed value.
“While the discovery of perchlorate has led to a variety of troublesome concerns for some residents, it’s my hope that by notifying you early of property tax relief I can alleviate one concern during this stressful and uncertain time,” Stone wrote in a letter his office will send to affected property owners in the area identified with the help of the Santa Clara Valley Water District.
As is Stone’s usual practice, in mid-May all property owners will receive an “advance notice” assessment notification card that states the assessed value for enrollment on 2003-2004 property tax rolls.
The assessor’s office says affected property owners should ask whether the market value as of Jan. 1, 2003 – the valuation or lien date – of their property is at least equal to the current assessed value. If a property’s assessed value exceeds the market value as of that date, property owners may be entitled to a temporary reduction in their assessment under Proposition 8.
The proposition, passed in 1978, requires the assessor to temporarily reduce assessed values whenever the market value is lower than the assessed value.
Property owners who believe their market value is below the value printed on the card are encouraged to submit a Proposition 8 review request form to the assessor’s office no later than June 15. However, requests for a review will be accepted only after property owners receive the assessment notification cards.
Typically, property owners who purchased property recently are the most likely to receive a temporary reduction becuase their assessed value is much closer to market value than a property that has not transferred ownership in several years.
Market values are determined by analyzing actual sales transactions of comparable properties in a given market area. While they are predicated on the Jan 1, 2003, date – before the perchlorate issue gained major media coverage – that doesn’t necessarily mean that there isn’t potential for relief in the property tax bills to be sent out this fall.
Although it’s admittedly speculation, it’s unlikely that property values were stabilized Jan. 1 but suddenly dropped between then and the present time, Stone said.
“There may be some progression. It may have had an impact on property values Jan. 1 and a continuing impact as of today – I just don’t know,” Stone said in an interview. “That’s the kind of research we need.”
Stone said his office hasn’t received an “overwhelming” number of calls, but officials have heard from residents who have indicated difficulty in selling or refinancing property for the values they believe existed before the perchlorate problem was identified.
“We’re saying ‘Let’s do the research and get the documentation that would support that claim, and we will make appropriate adjustments when we have that,’ ” Stone said. “The important part is the documentation.
“We need to see transactions that have occurred that we can compare to the marketplace or transactions that didn’t occur and fell out because of this problem, either through lenders or through buyers.”
If the assessed value of a property is indeed temporarily reduced, the assessed value will be compared to the market value each year until the market value is equal to or greater than the assessed value.
Assessor’s officials met with District 1 County Supervisor Don Gage, Morgan Hill Mayor Dennis Kennedy and Gilroy Mayor Tom Springer to discuss the issue.
The Proposition 8 review forms are available on the assessor’s Web site at www.scc-assessor.org
