Tax cuts possible for 10% of homes
Thousands of Nevada County properties bought at the height of the real estate boom could receive tax reductions this year, because some homes have plunged by as much as one-fourth of their value, according to the assessor’s office.
The county assessor is reviewing the value of 5,400 homes, representing about 10 percent of the properties on county tax rolls, to see if they qualify for a reduction.
“The market value of many homes has decreased. Our responsibility is to place the market value or assessed value on a property,” said county assessor Dale Flippin.
Early last year and the previous year, the real estate market peaked and was followed by a prolonged slump.
“That’s primarily who we are trying to target – the ones who got trapped in that peak market,” Flippin said.
Not all of the 5,400 properties the county plans to re-evaluate will qualify for a reduction, he said. Reductions are temporary and will return to the original assessed value when home markets rise again.
“We’ll now have to review these properties every year,” Flippin said.
Property tax values are based on the value at the time of a change in ownership or new construction.
Counties typically raise property taxes by as much as 2 percent each year under the guidelines of state Proposition 13, which was enacted by voters in June 1978.
Lowered assessments will mean less property tax revenue for the county this year, said Joe Christoffel, deputy county executive officer.
If property tax revenue grows less than 5.5 percent annually in future years, the county will have to draw upon the $3.4 million in reserves that was put away in good times, Christoffel said.
“Then the board will have to look at what degree to dip into reserves or what services to curtail,” Christoffel said.
Property tax represents the bulk of the county’s tax receipts.
The county had projected a 7.5 percent growth rate in property taxes in January, but the figure has been revised downward to 6 percent, Flippen said.
Last year, growth was 9 percent and two years ago it was as high as 13 percent, he said.
The county did not take steps to lower property taxes last year because growth patterns were flat, Flippin said.
Some homeowners disagreed and protested a 2 percent increase on their bills last year, citing a decline in real estate values. They also pointed to automatic rollbacks in some other areas.
The county is required to re-assess properties if homeowners request it. About 50 homeowners received property tax reductions last year.
The assessor’s office has received about 1,000 requests for property re-assessments so far this year.
In reviewing home values, inspectors will look at median home prices per square foot and sales of comparably sized homes in neighborhoods throughout the county.
From 2000 to 2006, the real estate market in Nevada County boomed, with property tax revenue reaching highs of 14 percent, Flippin said.
The prolonged housing slump has helped steer the nation to the brink of a recession.
“I don’t think we’ll come out of this quickly, but I do think we’ve reached bottom,” Flippin said.
To contact Staff Writer Laura Brown, e-mail email@example.com or call 477-4231.
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