You are not defenseless against the coming onslaught of tax increases from Sacramento if you own a home.
It is just a matter of time before the spending addicts up in Sacramento jack up the sales tax, income tax, and a host of other taxes to make up for their inability to live within the means of Californians.
Based on the first attempted end run by the Democrats, the tax increases on their way will cost a typical household in excess of $200 a year. That’s a big hit to your budget especially since most companies probably aren’t going to be forking out raises in 2009. Of course, that is assuming you still have a job in 2009.
So what do you do? Stand there and take it like a good little taxpayer or wait for another version of Proposition 13 to come along to free you from out-of-control legislative spending?
No. Instead you use laws put in place once-upon-a-time when people who we elected to go to Sacramento looked out for the welfare of the people that elected them. It will take a bit of work, but not much. You need to remember two dates — Jan. 1 and July 2 — and mark them on your calendar. You are going to challenge the assessed value of your home.
The odds are if you bought a home in the last five years, there is a good chance your home’s assessment is way too high.
The law is very explicit. You have the right to talk to the county assessor if you think your home is over valued based on what the market — read that comparable sales — is at on Jan. 1 of any given year. If the assessor doesn’t agree, then you have the right to file an assessment appeal.
It’s a move I definitely intend to make. I paid $185,000 in March for my two bedroom, one bathroom home that is 994 square feet. Since then prices have dropped considerably.
As a side note, I have absolutely no regrets about buying when I did. I paid a fair price for a home that I believe is about as close to a perfect fit to my lifestyle that is also located in a great neighborhood.
The value of your property as of next Thursday is what accounts for a request to lower your assessment or — if you have to — file an appeal on July 2, 2009.
I’ve been tracking sales within a two-block radius of my house for the past three months.
Here’s what I’ve come up with based on closed escrows.
• $130,000 for a three bedroom two bathroom home with 1,092 square feet at $119 per square foot.
• $115,000 for a three bedroom, one bathroom home with 1,026 square feet at $112 per square foot.
• $101,000 for a three bedroom, two bathroom home with 1,203 square feet at $83.90 per square foot.
• $124,000 for a three bedroom, one bathroom home with 1,472 square feet at $84.20 per square foot.
• $111,000 for a three bedroom, two bathroom home with 923 square feet at $120 per square foot.
• $115,000 for a three bedroom, two bathroom home with 1,082 square feet at $106 per square foot.
• $90,000 for a three bedroom, one bathroom home with 1,092 square feet at $82.40 per square foot.
My home comes in at $186 per square foot based on the March sales price. Also working in my favor is that every home listed is at least several years newer than mine.
Obviously I don’t know until I officially make the request for the assessor’s office to look at it, but given the fact nearby homes have gone for $61 to $103 less per square foot than mine has I think I stand a pretty good chance of getting something done without advancing to the appeals process.
The home closest to my size was $120 per square foot. In all likelihood that is probably as low as they will go since smaller homes tend to have a higher per square foot value for a lot of reasons.
Let’s say, though, that the county assessor does reduce my assessment but says it should be by only $50 per square foot that would be fine by me. Right now my property taxes are $1,850 a year. Such an adjustment would make my property taxes $1,350. Figuring what the state is going to do — plus the federal government —I’ll probably be treading water in the same place by the time everything is through. It’s better than sinking.
And I won’t feel a bit guilty given that only 12 cents of every $1 in property tax stays local anymore — the rest goes to Sacramento.
Also, I’m not wild about all of the breaks the government is giving — at everyone else’s expense including mine — to those who got liar loans.
I especially am irked at those who had interest only loans for three years — got full tax deduction advantages — and then were able to walk away from their home without being taxed on the amount the bank couldn’t recover in foreclosure. Meanwhile, as a renter and now a homeowner I’m paying full freight.
By the way, there are people who bought homes even before 2003 who might benefit from checking out their assessment against real property values on Jan. 1.
It’s a way to stop being a victim of the government as well as those who either through greed or stupidity triggered the entire housing collapse.