Several thousand homeowners throughout Santa Clara County – including 1,100 in Los Altos and Los Altos Hills – should expect an increase in their property taxes, according to the Office of the County Assessor.
County Assessor Larry Stone reported that approximately 47,000 properties would see their assessed values fully restored this year following the real estate market downturn. Another 81,000 properties in the county, including nearly 750 in Los Altos, will experience a partial restoration of the assessed values, which Stone noted was a reflection of the surging residential property market.
“Unemployment has dropped to 7 percent, faster than the nation or the state. The NASDAQ is soaring. Apartment rents have reached record levels with single-family homes close behind. It was inevitable that property taxes would follow,” Stone said in a statement released June 6.
Stone said that while increases in property taxes are never welcome, this is “ good news” for the local economy – and homeowners.
“It means the value of most families’ single most valuable asset, their home, is once again regaining solid equity lost in the collapse of the residential housing market,” he said.
The news comes after 136,000 residential properties were assessed below their purchase price last year. Stone’s report noted that when the market value of a property declines below the previously established assessed value measured as of Jan. 1 each year (lien date), the assessor is required proactively to reduce the assessed value to reflect the lower market value. However, as the real estate market rebounds, the assessor must restore the assessed values.
Proposition 8, passed by California voters in 1978, mandates that property owners are entitled to the lower of the fair market value of their property (as of Jan. 1), or the base-year value as determined at the time of purchase or construction, and increased in accordance with Proposition 13 by no more than 2 percent annually.
“If a property assessment was reduced during the recession, the restoration of its assessed value is not limited to 2 percent, until the market value reaches a property’s purchase price plus the annual inflation increase of no more than 2 percent,” Stone said. “The market solely determines whether the assessed value of a property is reduced or restored.”
The assessor mailed more than 478,000 assessment notices June 28 to property owners in Santa Clara County. In addition to outlining assessed property value, the notice also details the process for requesting an informal review of the assessment. According to the report, the Assessor’s Office will complete as many informal reviews as possible prior to Aug. 1, the deadline for making changes reflected on the property-tax bill mailed in October. Additionally, the letter includes language outlining the process for filing a formal assessment appeal by the Sept. 16 deadline.
For more information, visit www.sccassessor.org.