County to Cut Property Taxes on 1,850 Condos
In an unusual action triggered by the softening of the condominium market, Los Angeles County Assessor Alexander Pope on Friday announced he is reducing property taxes on about 1,850 condominiums because their resale values have fallen.
The affected condominiums are scattered across the county, but most are on the Westside, where a building spree several years ago saturated the market.
“There was overbuilding . . . and a lot of speculative buying and that drove (prices) up to a fairly high level that was not supported by the market,” Pope said.
Pope said he would encourage all condominium owners who believe their units have dropped in value to apply for an adjustment of their tax bills.
By contrast, the assessor said, single-family homes generally have held their values and tax reductions for their owners are not warranted.
Pope said that those condominiums for which property taxes will be reduced were reviewed by his office either because of taxpayer complaints or because assessor’s office analysts had noted a drop in sales prices for other condominiums in the same complexes.
Assessor officials said that, all told, they reevaluated several thousand condominiums and found that about 25%--reflecting a broad range of designs and locations--warranted tax cuts.
In many cases, some units in a single building received tax cuts while others did not, the officials said. Often, those that held their values had special features, such as good views.
Owners most likely to qualify for property tax reductions purchased condominiums between 1980 and 1982, when the market peaked and an estimated 40,000 to 50,000 condominiums were sold in the county.
The tax cuts, which will be effective on tax bills due in November, average about $170--equaling a $17,000 reduction in assessed value.
Some tax cuts will be as high as $1,000 on luxury penthouse units.
John G. Riley, a professor of economics at UCLA, was among those who triggered the review by complaining that Pope’s office had not moved quickly enough in reassessing changing sales prices.
Riley noted that his tax bill kept rising 2% a year, as permitted under Proposition 13, even though the value of his condominium had slipped.
Riley won a $15,000 reduction in the assessed value of his Westside condominium after filing an appeal.
“They had clear evidence from selling prices that things were not going up from the former values,” he said of assessor officials. “They ignored that.”
But Mark Ryavec, a spokesman for Pope, said the assessor’s office reacts two or three years late to marketplace changes, and staff cutbacks have made it impossible to pick up on changes any sooner.
Pope said that there are 145,000 condominiums countywide.
He characterized the tax reductions, which will amount to a $300,000 revenue loss for the county, as a one-time adjustment reflecting a dip in condominium selling prices.
But he said the condominium market has been stabilizing in the last two years.
“We do not want to get people’s hopes up, since the incidence of decline-in-value condos is not high,” he said.
However, one real estate analyst said the 1,800 tax reductions may be “only the tip of the iceberg. We have a continuing softened (condominium) market,” said Chris Lienberger, president of a Beverly Hills-based real estate consulting firm. “It certainly could be more widespread.”