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October 9, 2008

 

By Shaun Bishop - San Mateo County Times

 

 

San Mateo County sees spike in homeowners filing for value reassessment

 

 

The weak housing market has sent homeowners in San Mateo County flocking to the assessor's office to request lower property valuations that would result in lower taxes.

 

About 4,400 "decline in value" requests have flooded the San Mateo County Assessor's Office this year — nearly five times as many as the 900 requests last year, officials said.

 

Since property tax bills were sent out about a month ago, officials have been getting a steady stream of calls from property owners wondering whether they should apply for lower assessments, said Angelina Hunter, the deputy assessor-county clerk-recorder.

 

The reviews, which the assessor does for free, were established by Proposition 8, an amendment to Proposition 13. Once a resident fills out a simple one-page request form, a county appraiser determines the house's market value and reports back by Dec. 15, Hunter said.

 

Because the first installment of property taxes are due Dec. 10, Hunter said homeowners should make that payment on time. If the assessed value is lowered, the second installment will be adjusted accordingly.

 

With each "decline in value" review, the assessor calculates the market value of the home as of Jan. 1 and compares that with the current assessed value.

If the market value is lower, the assessment is reduced to that level for one year.

 

The property is then reassessed in January 2009 and every year after that until the market value catches up with the original assessment when the homeowner applied for a review.

 

At that point, any increases in the home's assessed value are capped by Prop. 13 at the rate of inflation or a maximum of 2 percent per year.

 

The limits of Prop. 13 also mean many longtime homeowners on the Peninsula still have lower assessed values than their properties are worth on the market, even as prices have declined. These homeowners would likely not benefit from a Proposition 8 review.

 

But residents who bought their homes in the past three or four years at high prices could benefit from a reassessment, Hunter said.

 

Of the 2,500 requests the assessor has processed so far, about 70 percent have resulted in reduced values.

 

Hunter said the biggest drops in assessed value have been for homes bought recently in depressed real estate markets such as South San Francisco, Daly City and East Palo Alto.

 

The median home price in San Mateo County dropped to $632,000 in August, down nearly 20 percent from the same time last year, when the median price was $788,000, according to DataQuick Information Systems.

 

"We are affected, for sure, but not quite as much as the other counties," Hunter said.

 

Santa Clara County's assessor also has seen a spike in "decline in value" applications this year of about 55 percent.

 

Median home prices in Santa Clara County were down 20.6 percent in August compared with a year ago that month, from $700,000 to $555,000. Prices in the Bay Area as a whole were down an average of 31.8 percent during that period.

 

E-mail Shaun Bishop at sbishop@dailynewsgroup.com.