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ABC7 On Your Side: Property taxes

July 14, 2008 12:00:00 AM PDT
If you bought a home and then saw its value take a nosedive, you may be entitled to a reduction in your property tax. One family managed to save thousands of dollars per year. Debbie Logan and her family bought a home with more than 3,000 square feet in the Inland Empire three years ago for a little more than $600,000. It was on an acre of land and zoned for horses, so they felt they paid a pretty good price.

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"That was a very good price at that time. We walked into a 'Phase-1 fallout,' so the other houses were going [for] over $700,000 in the neighborhood," said Debbie Logan.

But as we all know, the housing market took a nasty turn. Foreclosures popped up while home prices dropped. Now the Logan home is worth considerably less.

"I would say right now, it would be worth maybe $350,000-$400,000," said Logan.

That's a price drop of more than $200,000. When a home falls in value, then according to Proposition 8, homeowners are entitled to have their property taxes lowered. The county assessor may do that for you but it could take months.

So Debbie Logan went ahead and filed for a re-assessment of her property with the county on her own. And what a difference that made.

"I expect my taxes to go down about $350 a month," said Logan. For the Logan family, that's a savings of more than $4,000 a year.

Assistant Riverside County Assessor Frit Swain says the Logans aren't the only ones saving money by taking advantage of a California law that allows property taxes to be reduced when market values dip.

"Our office has looked at 270,000 properties over the past two months for reduction, just proactively on our own. Out of that, we've reduced over 200,000 of those," said Swain.

There are several companies who solicit homeowners to file the re-assessment for them. But Frit Swain warns they will charge hundreds of dollars for something you can do for free.

And one more thing: When you lower your taxes, the county assessor can raise them back up later when your property value goes back up. And they can raise them all the way back to what you were paying originally, all at once.

"It says in Proposition 13, you can only raise taxes by 2 percent. But then if you look at Proposition 8, which is the 'decline' legislation, it specifies that as of January 1st, any property that has been declined can come back all the way up to wherever the market is," said Swain.

"Lower property taxes for a few years to save money now when things are tight, that's OK with us," said Debbie Logan.

It's getting tougher to make ends meet these days, and ABC7 On Your Side is a campaign to help you save money. Watch Eyewitness News for money-saving tips and freebies to help stretch your dollar.

 

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