Property owners in the Mother Lode are learning that a rebounding market can be a double-edged sword.
Assessor offices in both Calaveras and Tuolumne counties are notifying thousands of property owners that the assessed value of their properties — the amount on which they pay property taxes — are increasing for the first time since the housing market crashed after 2005.
While that reflects an improving market and increasing housing prices, it also means higher property taxes. And for many homeowners, it means an unprecedented jump in tax bills into double-digit percentages.
“This is totally uncharted territory for a lot of property owners that had their property values reduced because of the economy,” said Tuolumne County Assessor Ken Caetano. “To see they’re starting to go up, it’s the double-edged sword.”
Under regulations set by Proposition 13, a homeowner’s assessed value can only increase at a rate of 2 percent a year for what is called a “factored base value.” But if the market plunges, the assessed value can be decreased if the market value is lower than the factored base value. This lowers property taxes in a slumping market.
Once the market picks back up, the assessed value will increase annually at the same rate as the market value until it gets back to the property’s peak “factored base value.”
In a nutshell, if your home’s value tanked in 2006 and is starting to increase in value again, your Prop. 13 protections won’t kick in until you reach the assessed value on the house at its peak year. If the market value jumps 10 percent in a year before then, the assessed value — and your tax bill — will jump at about the same rate.
For the full story, see the June 27, 2014, edition of The Union Democrat.