Property tax is set on appraised value, not purchase price

Q: I moved here last summer from Los Angeles. In Sep tember I purchased a small home in Fair field from my uncle. He had owned the place for almost 30 years and it was a rental for the past 10 years. Because he’s already retired and liked the idea of me living close by, he sold it to me for $275,000, well below market value. That way I could afford the relatively small mortgage payment. This week I got a letter from the County Assessor’s Office telling me that my property taxes were going up almost three-fold. I thought Proposition 13 fixed the property taxes at the pur chase price? I’m sure this is a mistake but I don’t know how to go about getting it fixed. What should I do?

A: Unfortunately, it probably isn’t a mistake.

Proposition 13 didn’t fix the property tax on the purchase price; it fixed the tax on the actual value of the property.

Using the sales price is a common and convenient way for the assessor to figure out what the market value of the property really is. And most of the time it’s pretty accurate.

In a regular, what we call, “arm’s length transaction,” the property has been exposed to the market and the buying public has decided how much it is worth.

In your case, you entered into a sweetheart deal with your uncle. The amount you paid for the property had no relationship to its actual value.

Once the purchase price showed up on an assessor’s desk, he or she immediately suspected that your property is worth more than $275,000. At that point the assessor conducted an appraisal and taxed the prop-

This process often takes months to complete, which is why you are only now

If you disagree with the new appraised value, you can contest the appraisal. But, assuming that the appraisal is in the right ballpark, I’m afraid you’re stuck with the higher payment.

Q: I refinanced my home in January. The mortgage company never sent me any coupons or called me about my payments. Consequently, I didn’t start making my payments. This week I received a letter from the mortgage company saying they were going to start foreclosure proceedings. I can’t be responsible for paying for the time they never gave me the coupons. What should I do?

A: Oh come on now. You don’t really believe that just because you never got the payment coupons you didn’t have to make payments on the loan?

When you didn’t receive the coupons by the date you had to start making payments you should have contacted the lender. Nowadays I’m sure you could have made them online at a minimum.

See Jones, Page 8

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