Irvine Real Estate Link, CA – Property taxes and declining property values

by Robert Mack on August 6, 2008

in Irvine Real Estate

This is going to be an informative blog for those who are not aware of the relationship between declining Irvine real estate property values and Orange County’s Net Assessed property taxes.

As real estate professionals,

The Mack Team of Century21 – Irvine, is committed to inform, educate and serve its clients (past and present). One of these issues is that why do we have to pay property taxes based on 2006 assessed values in 2008? The answer is: we don’t have to. Orange County—indeed, any other county—WILL NOT voluntarily reduce your property taxes based on declined property values. You, as the owner and resident of Orange County, must request it.

Let us stick to the year 2006 since it was the year when the Irvine real estate market (indeed nationwide) began its horrific descent. And let us assume you’ve purchased a property in that year for $750,000, just prior to the decline. The County levies a 1.2% tax ($9,000). In 2007 the property value remained stagnant or dropped. Next year the County increases the value of your home and land by another 2%, therefore, raising the taxable amount. Now in the eyes of the County your Irvine house is worth $765,000, and 1.2% of that is $9,180. It is fine as long as the real estate market does not deteriorate and your home appreciates more than 2% annually. But the market continues its decline and if you don’t put a step forward the County will increase the value of your property by yet another 2% the year after. Now your home is worth $780,300. Do you see what’s happening here? I’m sure you do, just do the math. But the market has declined so badly that if for any reason you want to sell your house it won’t fetch more than $600,000, if you are lucky.

What you do is to contact Orange County Assessor / Tax Collector and request a form called

REQUEST FOR INFORMAL ASSESSMENT REVIEW. It is important to include recently sold properties in and around your area that may have had similar values to your own home, in other words to tell the County ‘see, these houses are sold between 2007 and 2008 for only $600,000’ or whatever the case may have been at that time. The County will assess your request and, in all fairness and likelihood, it will reduce the assessed value of your home and levy property taxes bases on the lower amount, thereby saving you nearly two thousand dollars a year, based on the hypothetical scenario above.

The link

www.ocgov.com/assessor will take you to Orange County Assessor’s site, or have your parcel number ready and call (714) 834-2727. The representative will inform you as to when you should file this request and what the deadline is. Ask him or her for the appropriate form.

If you need help in finding how many similar homes to your home in and around your Irvine neighborhood have been sold for considerably lower prices (you will need three similar homes),

The Mack Team can help you, or contact your real estate professional.

Views, comments, responses and constructive criticisms are welcome.

Make it a great day.

The Mack Team

Robert & Tania Mack

Century21 Professionals

Irvine, Orange County, California.

http://www.irvinerealestatelink.com

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