Sacramento-area homeowners can expect property tax cuts

Nearly 180,000 Sacramento-area homeowners can expect millions of dollars in collective property tax cuts this fall as county assessors engage in a wholesale markdown of home values.

Assessors say the tax cuts may reach $104 million or more in the eight-county capital region – and primarily benefit people who bought homes in 2004 and afterward.

The wide-scale reassessments will enable owners with declining home values to keep more of their personal income as intended under Proposition 8, an initiative passed in 1978 that, among other things, requires reassessments when a home's value falls below its purchase price.

The new assessments will also sharply trim budgets for school districts, cities and counties and special districts during the 2008-09 fiscal year, which begins July 1.

This marks the second consecutive year assessors in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties have put residential property taxes under review. The reassessments come as mounting foreclosures and a massive inventory of discounted bank-repossessed homes have sharply depressed values.

Last year, Sacramento County reassessed 50,000 properties. This year the county is reviewing 85,000 residential properties, with potential tax cuts totaling $60 million or more. The median price of a home in the county is down 36 percent from its 2005 high.

The phenomenon is a repeat of the 1990s housing slump, during which one-third of Sacramento County homes were reassessed, according to Assessor Kenneth Stieger.

In Placer County, 50,000 homeowners could see their property taxes cut. The median home price is down nearly 33 percent from its 2005 high.

Qualifying homeowners throughout the region will not receive tax refunds; the county simply lowers the amount that must be paid. In many cases homeowners may see their bills drop $1,000 or more.

Assessors say that the reassessments are triggered automatically and that homeowners will be notified if their property is under review. Sacramento County began mailing notices Friday; Yolo County has already mailed some its notices. Other counties say they will send theirs soon.

Most assessors say the reduced property tax revenue won't cripple government budgets, only slow their rates of revenue growth.

Sacramento County will still have almost 1.5 percent more property tax money in the new fiscal year, according to Assistant Assessor Kathleen Kelleher. Placer County officials forecast tax revenue to be as much as 3 percent higher.

In both instances, values on commercial property have remained stable.

Those percentage increases, however, pale against the double-digit growth that marked the first years of the decade as construction boomed, home resales multiplied and house values skyrocketed.

In once-booming Yuba County, the reassessments will have historic consequences: The combined value of its parcels will drop 4 percent to 7 percent below this year's value – and, accordingly, drive county revenue into the red, said Assessor David Brown.

"We will have a negative assessment roll for what I think is the first time in the history of the county since 1850," he said. "We have had small growth years, but we never had a negative roll."

Homeowners whose property is not being re-evaluated have the right to request a reassessment, assessors say. And they warn people to be wary of companies offering to press the case for a reassessment – for a fee.

"Don't pay anybody who solicits you," said El Dorado County Assistant Assessor Karl Weiland. "Everything that those solicitors promise to do for $95, we will do, with one exception. I think they offer to take you through the appeal process, if necessary."

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• Call The Bee's Jim Wasserman, (916) 321-1102. Read his Home Front blog at www.sacbee.com/blogs.