Nearly a quarter of Santa Clara County homeowners will see steep property tax increases this year, Assessor Larry Stone warned Thursday.
The tax hikes reflect recent gains in the market value of homes that sank below their purchase price during the Great Recession, resulting in temporarily lower taxes.
Some of these 128,000 properties will see double digit increases in assessed value, the assessor's office said.
For example, single family homes that have made gains but are still below their purchase price will see a 13 percent average increase in assessed values and taxes. Condos in the same situation will increase on average by 20 percent.
In dollars, that's an average $829 tax increase for single family homes and a $750 increase for condos.
Notice of the increases in assessed value will be mailed to homeowners June 28.
Last year, 136,000 of the county's 478,000 properties were worth less than what their owners paid for them. This year, 47,000 have completely recovered their lost value. Another 81,000 have recovered some but not all of their original purchase price, based on market values as of Jan. 1.
Homeowner Zanaida Vega-Jones, whose home is in the Alum Rock Union School district of San Jose, says if she sees an increases, she'll ask for a review "just because of my neighborhood." She said she paid about $4,200 in property taxes last year.
"People are moving out of the area to Tracy and Modesto," she said. "We had a lot of empty houses last year, and a lot of foreclosed houses."
According to data released by the assessor, 887 condos in the Alum Rock Union district that are still below their purchase price but have recovered some lost value will see a 29 percent increase in assessed valuation, while 3,520 single family homes will see a 15 percent increase.
David Ginsborg, spokesman for the assessor's office, said that at the end of June homeowners will get a notice with their new assessed value and a PIN number for them to look up their property on the assessor's website. "You'll be able to go on line to see your assessed value and how we went about determining your value," he said.
A tax hike is not all bad news for the estimated 128,000 properties affected, Stone emphasized, saying the increases "are clear evidence that Silicon Valley is roaring out of the economic abyss created by the recession."
Contra Costa County Assessor Gus Kramer said he expects his county to show similar increases when the analysis is completed. "The numbers will be similar, not quite but almost as good as Santa Clara County because we have a little more diverse market than they do," he said.
Alameda County Assessor Ron Thomsen ¿said that of 103,000 properties that were below their purchase price last year, about 79,000 are going to increase in value this year. "It looks like we're going to be restoring $4 billion back on the roll due to these increases in prior year reductions," he said.
Usually, property taxes rise about 2 percent per year under state Proposition 13, which was passed in June 1978. But under the companion Proposition 8, which passed in November of that year, property that falls below the purchase price is reassessed at the current fair market value.
When the property regains its original value, its tax is what it would have been had it not dropped below purchase price. In other words, the county adds 2 percent to the assessed value for each year that it was assessed lower under Proposition 8.
Now, 47,000 Santa Clara County ¿properties that had their taxes lowered under the measure have recovered all the value lost, and then some. Another 81,000 have regained some but not all of their original purchase price.
"That's 128,000 homeowners that will experience an increase in assessed value, and in some cases double digit increases," Stone said. "For every 1 percent of additional tax the property owner pays, they regain 99 percent in lost equity that is now restored."
The remaining property owners in the county whose homes' market value never fell below their purchase price -- 75 percent of the total -- will see their assessments increase by the normal 2 percent.
After property owners receive their tax assessment notice, they can request an informal review until Aug 1. After that, a formal appeal must be made. More information is available at sccassessor.org/prop8.
Contact Pete Carey at 408-920-5419 Follow him on Twitter.com/petecarey.
There are 51,959 properties in Santa Clara County worth less than what their owners paid for them, but which recovered some of that loss during last year's market recovery. This table shows the average percentage increase in value for those properties. Only some single family homes in each school district are affected:
School District % increase
Alum Rock Union 15 percent
Berryessa Union 11 percent
Burbank 17 percent
Cambrian 14 percent
Campbell Union 15 percent
Cupertino Union 13 percent
Evergreen 14 percent
Franklin McKinley 13 percent
Gilroy Unified 14 percent
Lakeside Union 12 percent
Loma Prieta Union 12 percent
Los Altos 8 percent
Los Gatos-Saratoga 12 percent
Milpitas Unified 10 percent
Moreland 13 percent
Morgan Hill Unified 10 percent
Mount Pleasant 23 percent
Mountain View 8 percent
Oak Grove 14 percent
Orchard 10 percent
Palo Alto Unified 13 percent
San Jose Unified 14 percent
Santa Clara Unified 14 percent
Saratoga 8 percent
Sunnyvale 18 percent
Union 15 percent
Other 20 percent