Alameda County to reduce property taxes for select homeowners
ALAMEDA - Some Alameda County homeowners are about to get a pleasant surprise, with a significant reduction in their property taxes. It's all because of an obscure 1978 law, and a tax assessor who says he's just doing his job.
The announcement from Alameda County Assessor Phong La had some people wondering if it was a typo, or even some kind of joke.
"We're reducing the property tax assessments for over 8,000 homeowners in Alameda County." he said.
La said he's lowering the tax bill for more than 8,300 homeowners because their homes' value has dropped more than five percent below what they paid for it.
"I believe it is our duty, my duty as the assessor, to make sure that someone's property tax assessment is correct," said La. "And if the value has been dropped, then I need to review it and determine whether a reduction is warranted."
The properties in question were all purchased between January and October of last year. That was the height of the market and since then, the value of some homes has declined by as much as 10 percent. David Stark with the Bay East Association of Realtors explained why.
"The explanation is simple, it's a two-word explanation: interest rates," he said. "As interest rates have increased, the ability of buyers to achieve homeownership--more specifically to run up purchase prices--has come down. And as a result, when buyers can't run up prices or sellers can't run up prices...prices come down."
When the Assessor saw what was happening, he asked Bay East to help gather data on the situation. In 1978, Proposition 8 was approved to allow counties to temporarily lower tax assessments when real estate values decline. So, while the market is down, La is lowering taxes for some people who bought homes last year, reducing the county's tax revenue by more than 9 million dollars.
"It's my job," he said. "This is what I'm supposed to do, right?"
Property taxes help pay for schools and are a significant part of city revenues, but 9 million dollars spread out over the entire county probably won't bust anyone's budget. And La says overall the county will still increase its revenues by about 7 percent. But they won't be getting as much from 8,300 happy homeowners.
"I feel like it's part of my job. It's why I was elected to this job," La said. "I came from outside the Assessor's office. I ran for Assessor because I was angry at the Assessor's office!"
La said assessors have a lot of discretion about determining home values, and it's not easy to keep up on fluctuating prices. He got help from Bay East and BRIDGE Association of Realtors in Berkeley to generate the data he needed. He says other counties may just have a hard time trying to do it on their own.
When asked about what happens if prices increase, La said Prop 13 only allows for an increase of two percent per year. But if a property was given a reduction, that full amount can be reinstated immediately when market conditions improve.
