Home Front

A blog about the economy and the Sacramento-area real estate market.

May 16, 2008
Here come the property tax breaks

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I have been talking with county assessors across the region for the past 24 hours for a story running Saturday about property tax breaks for homeowners who bought after mid-2004 and saw their values tank.

We don't have all the numbers yet but it looks like thousands and thousands of your neighbors are going to be getting what's almost an equivalent of a second tax stimulus check this fall. Many will see their tax bill cut by 20, 30 and 40 percent, assessors say. That means more money in their pockets.

Assessors are required to lower property taxes when home values fall below what a buyer paid for the place. That requirement was added to the state Constitution in 1978, shortly after voters approved Prop. 13, which sharply limited property taxes.

What it means in layman's terms: if you bought a house in Placer County in 2005 for $500,00 - and now it's worth $400,000 - you will pay $1,000 less in property taxes during the fiscal year that starts July 1.

Governments, of course, are going to feel the bite of this, too. Most are going to get several million dollars less - $30 million less in revenue in Placer County in particular.

Here is a CNBC clip from earlier this week on the similar reassessments statewide, particularly in hard-hit Riverside County. There's a lot of strange back -and-forth toward the end of it between East Coast and West Coast anchors. But the first part gives you a good sense of what this is about in a state where home values are mostly falling - and falling pretty fast around here.

Image: countysupervisors.gov.

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