Credit portal




How to get property tax lowered

View Photo Gallery


Robert and Julia Kulick had to stand in line to buy their 2,000-square-foot condo in fashionable Talega three years ago. But the brand-new unit with a view of the Camp Pendleton hills was worth every cent of the $655,000 they paid for it - or so they thought.

Then the housing market crashed, and a similar unit in the Kulicks' complex sold recently for $509,000. The San Clemente couple now worry about foreclosure and the possibility of losing their home.

But there's one ray of sunshine in their misfortune. Since their home's value is less than what they paid for it, they stand to get a $1,500 break from the county tax man.

The Kulicks recently joined thousands of others in Orange County who are seeking to get their property taxes lowered in the face of a housing slump that's cut home values about 20 percent.


This year, almost 11,500 property owners have filed requests for informal assessment reviews, up from 247 during the 2006-07 tax year, which ended on June 30, according to county officials.

In addition, 7,323 homeowners have sought a hearing through the formal assessment appeals process, up from 3,430 a year ago.

The County Assessor's Office also is analyzing 150,000 properties sold from 2004-07 on its own to see how many deserve to have their taxes lowered. According to the assessor's Web site, 100,000 single-family homes and condo's and 16,000 timeshares will get a temporary value reduction that should lower their 2008-09 property taxes.

"It's just market, pure market," observed Orange County Assessor Webster Guillory, who is currently in the process of compiling this year's tax assessment role. Guillory's office will begin sending out notices in the next several weeks informing owners of their property's taxable values, the basis for property taxes due next November and February. (FOR LIST OF KEY PROPERTY TAX DATES, CLICK HERE .)

The Kulicks, and many others who bought their homes during the housing boom, stand to get their taxes reduced next year. But for the vast majority of Orange County's 570,000 homeowners, property taxes likely will go up - even though their home values have gone down.


Tax increases during a housing slump are just the flip side of Propostion 13, the voter-approved tax-fighting measure adopted in the 1970s. On the one hand, Prop. 13 limits annual tax increases to 2 percent a year - even in 2004, when Orange County home values

rocketed 32 percent upward.

On the other, assessors like Guillory can keep raising owners' taxes during a bust as well - at least until the property's fair market value falls below the Prop. 13 assessment.

"A lot of people think that because the market value is going down, they should have their taxes lowered," Guillory said. "They don't understand how Prop. 13 works. You're not taxed on your market value unless your market value is less than your taxable value."

For the most part, taxes are still rising for people who have owned their homes at least since 2003 because their homes still are worth more than they paid. But people who bought their homes in 2004 or later may qualify for tax reductions.

Among them, Debbie Powell, 46, who bought her four-bedroom, 3ВЅ-bathroom house in Las Flores in October 2005 - the month the housing slump began - and moved in with her teen-age son and three dogs, Emma, Duncan and Gus.

Since then, she's seen her home's value fall as much as $180,000, a 21 percent drop. Her taxes, however, increased by more than $200 in the last two years. Based on current market values, she could qualify for at least $2,000 off her $12,570 tax bill next year. She also wants to get the taxes she paid last year lowered as well.

She filed an appeal last year, but was traveling for work on the dates hearings were scheduled. So now she's trying to refile and launch reviews for both years.

"This is kind of an arduous process for someone who's just trying to make a living every day," said Powell, one of 27 people attending a county workshop on the assessment appeals process last month. "I learned way more than I ever wanted to learn about the tax process in California."

Jane Nguyen of Aliso Viejo was hoping to downsize when she bought a 1,550-square-foot townhouse in 2004.

But before she could sell her original house, prices started dropping. Rather than sell for less, she decided to stay put and rent out the townhouse. This year, however, the value of the townhouse fell below what she paid for it in 2004, and she appealed the assessment.

At the hearing, Nguyen got a reduction in her property assessment - from above $600,000 to around $550,000, she said. But she believes that comparable values now are around $400,000.

"It helped me a little bit, but not to the actual value of the neighborhood," she said.

Contact the writer: 714-796-7734 or

Category: Taxes

Similar articles: