Proposition 8 Program FAQS:
The following are the typical questions/answers about the Proposition 8 Property Tax Reduction Program:
What is this program about?
Did you know that most property in California is over-assessed, and that most property owners pay too much in property taxes. If you own your home, it's likely you're paying too much in property taxes. The National Taxpayers Union estimates that 60 % of taxable property in the United States is over-assessed! Despite the declining values we are experiencing today, most people don't appeal their property taxes because they simply don't know how.
State law (Proposition 8, Temporary Reduction of Assessed Value For Property Tax Purposes, passed in 1979) allows property values to be reduced if there is a decline in market values below the current assessed value.
Who is affected?
Property values have declined significantly over the last 3-Years. If you purchased your home between the years 2004 - 2006, your assessed value is probably much higher then the present market value.
How much can I save?
* Properties in your neighborhood on average have declined between $150,000 - $200,000, which represents a substantial negative decline. Based on the current Proposition 13 Tax Rates, if your home has not been reassessed in the last several years you could typically save from hundreds to even thousands of dollars each year. Your actual savings will depend upon the current assessed value, tax rate, and the prevailing market value, which can be best determined from a complete Real Estate Appraisal. Professional Appraisal Associates will verify your property data, and provide you with a rough estimate of your expected savings before beginning the process.
How much does it cost?
The cost for pre-completion of the informal assessment review form, and a General Purpose Form 2055 (Non-Lender) Exterior-Only Real Estate Appraisal is $ 350.00. The only remaining item is a signature and submission/mailing of the package to the County of Santa Barbara Assessor's Office by the legal property owner.
What is an appraisal?
A Real Estate Appraisal performed by a California State Licensed/Certified Real Estate Appraiser will document and establish your home’s "true market value" for the Assessment Review Process. Technically, an appraisal is an unbiased estimate of what a buyer might expect to pay - or a seller receive - for a parcel of real estate, where both buyer and seller are informed parties. To be an informed party, most people turn to a licensed, certified, professional appraiser to provide them with the most accurate estimate of the true value of their property.
Can I use another appraisal?
The appraisal report is an estimate of value considering your unique property characteristics such as lot size, gross living area, bedroom/bathrooms, and other special amenities. The appraisal process then compares these features with similar recent sales in your immediate neighborhood to derive an estimate of value for your specific property.
Do you come into my home for the appraisal?
No, we do not need to enter your property. We will perform a General Purpose **Form 2055 (Non-Lender) Exterior Only Appraisal, which has been deemed acceptable documentation for the Assessment Review Process. This type of appraisal is commonly referred to as a "Drive-By Appraisal," and there is no need to schedule any inspection appointments or disrupt your busy schedule. In most cases, the homeowner is not even aware that an appraisal was performed since it simply involves a photograph of the front of your house from only the street.
Do I really need an appraisal?
No. Although an appraisal is not required, you must provide the County Assessor’s Office with "Comparable Market Data Information," and this data should meet specific criteria. This must be a special retrospective market value appraisal with an effective postdate of January 1st. The form must also provide your Assessors Parcel Number along with proper and substantial evidence if you claim that the full market value of your property is less than your current assessed value. This type of market data information is all part of a comprehensive Real Estate Appraisal performed by a California State Licensed/Certified Real Estate Appraiser. In addition, the assessment review form specifically allows for a documented appraisal report to be attached, which provides strong value support and helps speed/streamline the overall assessor review process. An Appraisal Report attachment may also help avoid the lengthy and complex Valuation Appeal process.
Can I just provide Active Area Listings?
No, the “Comparable Market Data Information” must be recent bona-fide recorded closed sales prior to January 1st, and these must meet specific comparative criteria. Appraiser specialists from the Assessor’s Office will be reviewing this form, along with all of the selected comparables. By merely submitting a Realtor’s list of recent homes for sale in your neighborhood, you face assessment review rejection and may be forced into the rather complicated Valuation Appeal process.
When must I submit this assessment review?
The sooner you submit, the sooner you will not risk missing the deadline for next year's tax bill. Accurate January 1st market data, along with an accompanying Real Estate Appraisal can also help speed the process, since it aids in faster processing and acceptance. Proper comparable selection, and a comprehensive appraisal report provides the compelling evidence and helps avoid delays with additional appraisal work by the Assessor.
Can I submit the form myself?
Any property owner can submit an informal assessment review form, and an appraisal is not required. Based upon our experience, you can greatly improve the chances of accurate valuation, speed the process, and help avoid the complex appeal process, if you also provide a comprehensive Real Estate Appraisal performed by a California State Licensed/Certified Real Estate Appraiser.
What if I want to appeal my value?
If you received a Section 51 Value Reduction Notice letter from the Assessor, but disagree with the value, we can also perform a Real Estate Appraisal and assist you in filing a formal Application for Changed Assessment with the Clerk of the Board.
What is Proposition 8?
Proposition 8 and Section 51 of the California Revenue and Taxation Code provides that the assessed value of any property shall not exceed its full market value on January 1. If you submit evidence that the full market value of your property was less than your assessed value as of January 1, you can submit a request for informal review and obtain lower property taxes.
Will the Santa Barbara Assessor's Office lower my taxes?
As a result of Proposition 8 and Section 51 of the California Revenue and Taxation Code, all County Assessor’s in California are required to review and consider requests for value reassessment with proper evidence, and then they are required to reduce taxes correspondingly. A properly documented and supported assessment review form will ensure timely processing and acceptance.
What if I already received a Section 51 Value Reduction Notice of Property Tax Reduction from the Assessor?
You should still submit an Informal Assessment Review Form regardless. You still may qualify for additional tax savings since the Santa Barbara County Assessor's Office uses a computerized Ad Valorem Mass-Appraisal technique which is based upon a simple straight-line reduction percentage applied to all properties across a large geographic area. This fixed decline percentage does not take into account the unique nuances and special aspects of your specific neighborhood or home, and may inadvertently overvalue your property. A comprehensive accompanying Real Estate Appraisal will consider all the unique aspects and more accurately value your specific home, and will also factor the many subtleties such as school districts, geographic boundaries, water districts, unique areas, etc. After the Proposition 8 Review Appraisal has been submitted, the Assessor's Office is required to enroll the lesser value.
What happens after my new lower Prop 8 Value
The Santa Barbara County Assessor's Office will now review your property values on an annual basis each January 1st, and it can be reassessed if values should increase. Once the Real Estate market has recovered and the values finally begin to increase again, the assessment of the property will then be correspondingly increased (plus the normal annual 2% inflation factor mandated by Proposition 13).
Please understand that by California law under no circumstances can this increase in value exceed the original Proposition 13 assessed value (plus the standard 2% inflationary factor compounded), so you have everything to gain, and nothing to lose by switching to a new lower Prop 8 assessed value.
How long will my taxes stay reduced?
Any Proposition 8 tax reduction is technically considered temporary, although some tax appeal reductions in our county have lasted for over 10+ years. As a minimum, your reduced tax rate will last one year. Realistically, based upon current market conditions and forecasts, the reductions will probably last for several years. Your assessment value and taxes will eventually increase back to the original Proposition 13 rules when the Assessor’s Office decides to reassess your area after the market values have increased. Your taxes will simply revert back to the original Proposition 13 amount upon reassessment. Your taxes can never go higher than the original Prop 13 rules.
Although no one has a crystal ball, based upon the current market and forecasts it may be several years before values actually return to the pre-2004 values.
Why should I bother?
Property values are declining, but the Proposition 8 laws can help you save significantly on your next property tax bill. Our clients can typically save from hundreds to even thousands on their next Santa Barbara County property tax bill. You can pay only $300.00 today, and then save thousands.
What if I do nothing?
Over time, the County of Santa Barbara Assessor's Office will possibly reappraise your property and reassess your property tax value to either a lower or higher amount in the future. Unfortunately, the office has a very high workload with many properties to appraise, so your tax bill savings could not be realized until the next subsequent tax years, if ever. In addition, since the assessor uses an Ad Valorem Mass-Appraisal technique, the assessed value may not exactly reflect the latest declining market value, so your savings could be less if you do not submit an Assessment Review Request.
How can I get more information?
The best source for information related to Proposition 8 is the County of Santa Barbara Assessor's Office. If you live in the Santa Barbara or the Santa Ynez Valley Area, you can call (805) 568-2550 for more information. Feel free to ask the representatives if a Real Estate Appraisal attachment would be beneficial to the overall review and process.
* Actual Decline and Savings may vary.
** General Purpose Form 2055 Exterior (Non USPAP Lender) Real Estate Appraisal Report carries a revised Supplemental Scope of Work and special Intended Use Statement for the special Property Tax Reduction purpose.