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| Friday, Feb 22 2008 11:27 AM
Last Updated: Friday, Feb 22 2008 4:54 PM
More than 40,000 homes suspected of losing value since their purchase are under review by the Kern County Assessor, a process that will reduce property tax bills for many homeowners, but also shrink a critical source of revenue to county services and schools.
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• Not every homeowner will see their property tax drop. Many residences have maintained their value, or gained value since being purchased. Homes bought between July 2004 and December 2007 are being reviewed for possible reductions.
• The Kern County Assessor uses the date of Jan. 1, 2008 to set new values.
• Homeowners are not at risk of seeing a surprise jump in their bills. The base value of a residence is set at purchase, or when a new house is built, and increases 2 percent each following year.
• Homeowners will get a notice in the mail by July 15 if their tax bill will be lowered.
• Any property tax breaks will appear on the bill mailed to homeowners in September.
• When the market rebounds and these homes regain their original value, property tax bills will be reset based on the base value established at purchase.
• There’s no reason to call the Assessor’s office, Assessor-Recorder Jim Fitch said. The reviews occur automatically.
Source: Kern County Assessor-Recorder’s office
Assessor office employees are using computer models and fieldwork to reassess the values of homes bought between July 2004 and December 2007. Many who bought in this time window will see a 15 or 16 percent reduction in their home’s value, and in their 2008 property taxes, Assessor-Recorder Jim Fitch said.
An average annual property tax bill for these homeowners might run around $3,000, and may fall by $500 or $600 now that property values have dropped, he said.
“I was somewhat predicting this back in 2005,” Fitch said. “Whatever goes up so fast can always go down just as fast and, sure enough, this is what has taken place.”
State law requires county assessors to lower the taxes on homes where values have dropped below what was paid at the date of purchase, which is when a home’s base value is established for tax purposes. Normally, property tax bills increase from the base by 2 percent each year.
The county lowered taxes last year for about 14,000 taxpayers whose home values had already dipped below their purchase price by Jan. 1 2007.
Today’s reassessments have precedent. The county lowered tax bills for about 27,000 properties during the late-’90s housing slump, Fitch said.
As of January, the median home price in Bakersfield had plunged to $225,000, 25 percent below its peak in June 2006, according to a monthly report by Bakersfield residential appraiser Gary Crabtree.
“It’s an economic stimulus package,” Fitch said of the smaller bills. “But it’s not good news for these people.”
And neither does it bode well for the county’s coffers.
“Potentially, we’re looking at a $2 billion reduction to the assessment roll,” Fitch said, referring to the annual taxable value of Kern County property, from which government calculates total collectable property taxes for the year. Kern’s taxable property value has been on the rise since 2002. A decline will impact schools, cities and special districts, he said.
Property taxes make up the largest portion of dollars Kern County supervisors can spend as they wish, said the county’s director of budget and finance, Debbie Stevenson. Most county departments — including welfare, human services, fire, sheriff’s, parks and libraries — receive some general funds.
“There will be an impact to the county,” Stevenson said.
About 19.5 percent of collected property taxes feed the general fund, Auditor-Controller-County Clerk Ann Barnett said. Another 8.9 percent funds the county’s fire department.
But commercial and oil and gas properties are also taxed, and those funds may offset the diminished revenue from residential taxpayers, Stevenson said.
If property tax revenues stay flat or fall, county supervisors will be tasked with deciding how to respond, she said.
They could decide to reduce expenditures, slash services or dip into a reserve fund, Stevenson said.
One thing the assessor’s review will have little bearing on is how much a home might fetch if it is listed for sale, according to Susan Ferguson, a real estate agent with Coldwell Banker Preferred.
“When we go to do (comparables), we’re not looking at assessable value,” Ferguson said. “We’re looking at today’s values of properties.”
That market value is established by researching similar recent sales, she said.
“This is a gift,” Ferguson said. “This is reality. I don’t think anybody should be alarmed by the fact they might get a reduction in their property taxes.”
Homeowners who receive a property tax reduction will be notified by mail by July 15, and the tax break will appear on September bills.