Fairness, Sameness Not Equal in Property Tax

The idea of “current market value” as expressed by Mr. Ackerman is difficult to define. If homeowners asked three real estate brokers or appraisers to give a “current market value” for their home, they could easily get three different opinions.

An attempt to reassess every parcel of property in the state every year at “current market value” would be a logistic nightmare. Assessors’ offices throughout the state would be overwhelmed with work. It would take hundreds of new employees to accurately reassess every parcel every year.

Thousands of property owners appeal their tax assessments each year. If an annual reassessment were instituted, tens of thousands of property owners would appeal. This logjam of appeals would force the government to add additional personnel to handle the caseload. This would especially be true for the multitude of commercial properties in the state.

As a property tax consultant, I am constantly negotiating with the various assessors’ offices regarding the market value of my clients’ properties. Small differences in capitalization rates, construction costs, net operating income, vacancy rates, financing--even the amount of rentable space in a building--can all contribute to vastly different opinions of the market value of a property.

An annual reassessment during the double-digit appreciation years of the late 1980s would have caused many people to lose their homes, especially the elderly on fixed incomes and young homeowners scraping by to pay their bills. Annual reassessments of commercial property during that time would have caused some business owners to leave California, taking their jobs with them.

Proposition 13 may not be perfect, but it does allow property owners to know that their property will not be arbitrarily reassessed.

MICHAEL TIERNEY

El Toro