Property Tax Reassessment Scams

Image by hoveringdog via Flickr

It seems these days almost anything can be a scam.  We’ve had mortgage loan scammers, rental scammers, foreclosure savior con artists and loan mod sharks. The latest con ? Property tax reassessment.

Let’s say you paid $750,000 for your home and now it’s worth about $550,000, but you’re still paying property tax on the purchase price. Enter the scammer who poses as a legitimate government agent or agency and offers to file a tax assessment appeal on your behalf—for a fee. Thing is–you can easily do this yourself–for free. There is nothing illegal about charging for the service of filing an assessment appeal. But it must be made clear that the company offering the service is not a Government agency and that their services are not approved by any government agency. Even if proper disclosure is made, though, it is not clear why anyone would pay for such a service.
Here’s what you do. First, don’t pay hundreds of dollars to any company no matter how “official” it may appear. The tax assessor does not send out letters and the tax assessor does not charge when you file an appeal. So, ignore the scammer’s letter and go to directly to the county tax assessors website. Each county has a tax assessor’s website. There, download the appeal form.

This form will ask the usual information and then will also request two area comparable sales that make you think your property is now worth less. How do you find the comps? Probably the best way is to call your friendly neighborhood real estate agent and ask him or her to look up some comps for you. The good part here is the agent will be able to tell you if it’s going to be worthwhile filing right now. It may be better in some areas to wait for 6 months or so. If you don’t have a real estate agent nearby, give me a call at 626-641-0346 and I will be able to provide help anywhere in Southern California.

Once you fill out your form with your information and the relevant compus, upload it to the website and then–wait. In a few weeks the answer will come. If the tax assessors says no, don’t give up. File again in six months. Property values, after all, are still falling. Sometimes the poor tax assessor takes awhile to see the big picture.

Believe it or not, sometimes the the Los Angeles County Tax Assessor  and many others  actually reviews tax assessments on its own.. Last year, the Los Angeles County Assessor’s office “initiated a review of single-family residences and condos purchased between July 1, 2004 and June 30, 2007. About 318,000 homes were reviewed, resulting in substantial savings for 128,000 homeowners.” In 2009, the review will be expanded to some 500,000 single family homes and condos purchased between July, 2003 and June,.2008. The office notes, “There is no reason to pay for a review that will be done for free.”

“All 500,000 owners whose homes are reviewed will receive a letter by the end of June notifying them of the results. Owners who disagree with the results or were not included in the review, may file an application through December 31.” There is no charge for this.

In California, it can be a little tricky to determine whether your tax assessment is too high. People tend to forget that the assessment is based on a value determined at the first of the year; and then the bill can stretch into the following year. For example, Californians have until April, 2009 to pay the second half of their current property tax bill. That’s the second half of a fiscal year that started July 1, 2008. And the bill was based on an assessment of value as of January 1, 2008. So there is, today, more than a year’s lag between the assessed value and today’s market value. Sure, market values have decreased since last January, but that’s not relevant for the current bill.

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