New-Home Owners to Be Assessed Higher Taxes

Thousands of new-home owners can expect to pay $300 to $700 in extra property taxes this year because of a change in the way the county calculates house values.

Under the new system, the assessor’s office is basing the tax bills for many new homes on the value of each property as well as the value of the subdivision’s curbs, gutters, lighting and other improvements funded with certain types of special assessment bonds.

Property owners had expected to be assessed only for the value of their homes, and some are fighting the additional fees.

“I’m furious, and so are my neighbors,” said Michael Hartlieb, who recently moved into a new home in Irvine’s Westpark area. The new assessment on his property amounts to about $400 a year in additional tax, he said. “It’s just outrageous. It’s a double tax. People are livid.”

County Assessor Bradley L. 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 are required under state law.

“Until we got [the notice], I thought it was discretionary and didn’t do it,” Jacobs said. “I don’t want to do it, but it’s the law.”

Others, however, say that Jacobs is misinterpreting the law and that most of the new assessments probably are not justified.

County officials said they are not sure exactly how many people are affected by the change. But Irvine Councilman Barry J. Hammond, whose own property tax bill includes the new assessment, said perhaps as many as 15,000 homeowners are being asked to pay more.

“This affects virtually anyone who purchased a newly built home that has these special assessment bonds,” Hammond said. “It’s wide-reaching.”

At issue are 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 types of bonds, but the new application of the rules appears to affect only homes built in the last year or two.

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

Jacobs said homeowners who paid for the street and sidewalk improvements up front as part of the purchase price of their houses are not affected either.

But those who are paying for the improvements incrementally are liable for the fee, Jacobs said, because the purchase price does not reflect the value that the streets and sidewalks add to the property.

“This is tremendously complicated, and we don’t want to do it. But we have to,” Jacobs said. “People who are calling us are not happy about it. We aren’t either.”

Gene Palmer, supervising property appraiser for the Board of Equalization, said state law does require the extra charges.

But Hammond and other property owners strongly disagree, saying the state’s assessor handbook allows for the assessment of improvement bonds only if the value of the home itself has changed.

Hammond said he has spoken with Orange County supervisors and state legislators about having the issue clarified immediately.

“I’ve filed an appeal on my assessment,” he said. “But that could take two years before I get a hearing. . . . I think the assessor needs to address this much sooner than that.”

Homeowners have begun complaining not only to the assessor’s office but to county supervisors and major developers.

Larry Thomas, senior vice president of the Irvine Co., said the giant developer does not have a financial stake in the issue but can understand homeowners’ frustrations.

“The view we take is that this is a misunderstanding or difference of opinion that appears to be an unjustified overassessment of homeowners,” Thomas said. “We sympathize with them.”