Assessor Makes Property Tax Correction

In an unusual action, Orange County Assessor Bradley L. Jacobs corrected a system he had used for basing tax bills for new-home owners. The move could mean a savings of $300 to $700 for an estimated 2,000 property owners.

“This news is certainly a very welcome holiday present for thousands of homeowners who have been facing increased property taxes,” said Supervisor Tom Wilson, who had urged Jacobs to make the correction.

In a letter sent to Board of Supervisors Chairman Jim Silva on Monday, Jacobs explained that he was making the corrections to the 1998-99 assessment roll values for property and that homeowners will receive corrected tax bills before April 10, 1999, the deadline to pay the second installment on property taxes.

Jacobs had based the tax bills on the value of each property as well as on the value of the subdivision’s curbs, gutters, lighting and other improvements funded with certain types of special assessment bonds.

Wilson had criticized Jacobs for the assessments as “unfair” and said that Jacobs’ system amounted to “double taxation.”

Jacobs said his office began charging for the value of infrastructure improvements late last year after the California Board of Equalization sent a notice stating that the assessments were required under state law.

But many residents and officials such as Wilson had argued that Jacobs had misinterpreted the law.

“We have concluded that the bonds are not currently affecting the market values of these single family properties. . . . These corrections will result in value reductions,” Jacobs’ letter states.

The assessor’s office will be notifying those property owners affected in the next few weeks.

At issue were homes in developments that financed streets, sidewalks, gutters and other improvements with notes issued under the so-called 1911 and 1915 bond acts. It is unclear how many subdivisions in the county use those bonds. But Jacobs’ application of the rules appears to affect only homes built in the last year or two.

Mello-Roos bonds, which many planned communities use to pay for schools and parks, are not covered by the new rules.

These bonds differed from Mello-Roos bonds. They were divided among the properties and placed as liens against the home. A homeowner has the choice to pay off the total lien or to pay it off over time.

Wilson said the assessor’s office had been adding the outstanding amount to the sale cost of the home for determining the assessed value for property taxes.

“The assessor was wrong in his practice,” Wilson said. “With this reversal in calculating assessments, those homeowners will have a much happier new year.”