Here is the latest scam that is going on which was brought to our attention by our clients as well as at our recent Keller Williams Office meeting. Private companies are trying to take advantage of homeowners who are upside down on their property values. Homeowners have been receiving a notice in the mail stating that they need to pay anywhere between $100-$200 to apply for a property tax reduction. The letter also goes on to say that there is an imposed timeline in which you have to file with their company before They charge a late fee. There are various companies that are crawling out of the woodwork to scam homeowners into thinking they must respond to these letters. I am here to get the word out to you . There are no fees associated with applying for a property tax reduction through the County Assessors office Period!! only a government agency can issue such notices, it is a violation of California laws. If you or someone you know receives an illegal solicitation, please contact the Los Angeles County Department of Consumer Affairs by phone at (800) 973-3370 or visit their website.
Another issue that our clients are concerned with is seeing a 2% tax increase in their property taxes in this declining market. You may ask yourself but how can my taxes increase when property values are decreasing? Here's how it works. Unless you own a single family home or condo that you bought after July 1, 2004, the value of your property as shown on the property tax bill probably went up by 2% from last year. You might wonder how is this possible when real estate values are dropping. The answer is in the way property is valued under Proposition 13. Generally speaking, the assessed value of your property under Proposition 13 is established when you either buy or build the property. This is called the "base year value". This base year value can only increase by 2% each year, even if the market value of the property increases at a significantly higher rate. In a rapidly increasing real estate market, like we experienced in the early 2000's, the difference between the assessed value of your property and the actual market value can be substantial. For example, If you purchased your home in 2000 for $240,000, the base year value is $240,000. By 2004, the actual market value of your property had increased to $420,000 but the assessed value, limited by 2% annual increases, had only increased to $259,782. In 2005, the market value of your property began to drop. Even though the drop was significant, all the way down to $320,000 by 2008, it was still more than the 2008 assessed value of $281,194. If at some point in the future, the market value of your property drops below the assessed value, the 2% will not be applied and the actual market value of your property will be the assessed value for that year.