With a hot seller's market such that we're seeing here in the Silicon Valley, comes great property values, and with greater property values comes greater property taxes. It's kind of a downside to owning a home, but the money is need to pay for local services and what-not. For first time home buyers that express angst about buying a home due to property tax, I always remind them that their property can be written off against their personal income taxes.
Property values have been skyrocketing throughout the region, and it's not a surprise that the assessor is close behind.
Of the county's 415,000 owners of single family homes and condominiums, 36,000 can expect a bump, and the majority of those will see a double-digit increase. The tax hikes reflect the latest gains in the market value of homes that sank below their purchase price during the Great Recession, resulting in temporarily lower taxes.
Wednesday's announcement "confirms the continued strength of Silicon Valley's economy," Stone said. "For the first time in years, every city in Santa Clara County experienced a year-over-year increase in market values."
He called the new round of assessments "good news for property owners, because the market is restoring equity they had lost. For every $1 of additional property tax they pay, they receive an additional $100 of equity that was lost during the recession. The way I put it is, 'You give me a dollar, I'll give you a hundred.' "
Notice of the increases in assessed value will be mailed to homeowners June 26.
This is the fourth consecutive year that the number of residential properties assessed below their purchase price has declined.
Three years ago, 134,000 of the county's properties were worth less than what their owners paid for them. Two years ago, that number fell to 79,000, and last year to 36,000. This year, 21,000 remain below their original purchase price. But 13,500 have completely recovered their lost value.
Even the 379,000 homeowners who already stand at market value can expect a 1.99 percent increase in assessed valuation. It's a keeping-up-with-inflation bump that's allowed under the provisions of state Proposition 13, which was passed in 1978.
Under the companion Proposition 8, passed that same year, property that falls below the purchase price is reassessed at the current fair market value. This week's announcement by Stone is a response to the continuing rise in median sale prices, though specific valuations also take other factors into consideration, including geographic location, the number of bedrooms in a home and the quality of neighborhood schools.
Taken countywide, the median sale price rose 15.6 percent over the previous year. Looked at by municipality, the median increase varies:
by 20 percent in the cities of Santa Clara and Cupertino; 10 percent in Los Gatos and Almaden; and 3 percent in Gilroy.
The report issued Wednesday by the assessor also shows that the market value of properties in Los Altos, Mountain View, Cupertino and Palo Alto have risen by more than 40 percent since the recession began in 2008.
The recovery hasn't been so robust in other parts of the county: one third of Gilroy's properties are still assessed below their purchase price, and the same is true for 19 percent of properties in San Jose.
"The properties that got hit the hardest during the recession were in South County: Gilroy, Morgan Hill, San Jose and to a certain extent Milpitas," Stone pointed out. In some parts of South County "the market value declined as much as 60 percent during the recession. That's a pretty big hole."
But the county's homeowners continue to dig their way out.
David Ginsborg, spokesman for the assessor's office, said the June 26 notice will give each homeowner his or her new assessed value and a PIN number to look up the property on the assessor's website. "People want to know, 'What do I do?' Wait until you get the notice on or after June 26, then you can do everything online."
Source: MercuryNews, Richard Scheinin
http://www.mercurynews.com/business/ci_28332338/property-values-go-up-do-assessments
