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I received a come-on letter from a lawyer who wants to represent me in an appeal of my residential property tax assessment under California's Proposition 8 (enacted in 1978, concerning temporary declines in value). "Unless I win you a tax reduction, there is no cost, no fee, and no expense of any kind."

My (perhaps overly cynical) fear is that the letter does not present the complete picture and that once all the pieces come together, it's unlikely to actually save me anything significant and may even cost me more in the long run.

If it matters, I live in San Francisco and purchased my home in the summer of 2009.

The state's web page on the issue seems to indicate that counties are being proactive about this, implying (to me, anyway) that an appeal is unnecessary and unlikely to be hugely successful.

My instincts say I should beware and stay far away.

Is this type of property tax assessment appeal something I should look into (perhaps with a lawyer of my own choosing)? Or is this almost certainly a losing strategy and I shouldn't spend one more minute of my time thinking about it? Should I just go on a site like Zillow and see what it thinks my property and comparable nearby properties are worth, compare that to what I'm being assessed at, multiply the difference by my property tax rate, and use that to determine if it is worth even thinking about? Or is that not a sufficiently reliable way to make a determination?

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2 Answers

Generally you don't need anyone to represent you or even dispute unless you think that there is huge difference between the automatically reduced value by the county and what you think your house should be valued at. As you mentioned, check sites like Zillow to get a decent estimate of your house value. Look similar sold properties in your neighborhood in addition to looking at site's estimate for your property. The reason it is not worth hiring anyone is that while counties may estimate your property little higher value than what you estimate, the tax amount in question is about 1% of that which is typically not that much. So for example if a house worth about $400k, you think should be valued at about $380k, you are talking about ~$200 saving for the year. The next year the county would again reevaluate the value. Any company employee looking at all the records and doing research for just $200 saving isn't going to be worth it because even if it is split in half you both get just $100.

The dispute process is pretty simple and you can do it yourself. Follow the instructions on the site or given in the reassessment notice. You have to first contact the Office of Assessor-Recorder and then contact Assessment Appeals Board if necessary.

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Many of these tax lawyers that work "on contingency" will take an even bigger cut than half. –  KeithS Nov 29 '12 at 21:12
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Proposition 8 allows proper reassessment when you have to rebuild your house due to a disaster. It says that if the value of the rebuilt home is similar to the value of the destroyed home, there shouldn't be reassessment. Proposition 13 of the same year limits the tax hikes when the value is increasing, but didn't take into the account this scenario, and people were concerned that it would give the counties an opportunity to raise taxes in case of a major disaster.

To the best of my knowledge, there was no disaster in San Francisco since 2009, and unless I missed something in the news, there shouldn't be any reassessment based on the value of the rebuilt property.

As to the "declining market"... For SF from 2009 to 2012, I believe it is not the case.

I believe you're being scammed.

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The letter is correct and is not a scam. The California Prop 8 allowed for reduction of assessed value of the property during a declining market which Prop 13 did not. This was in addition to the major disaster clause that was added as part of the Prop 8. –  amit_g Nov 29 '12 at 0:24
    
Actually with Prop 13 and Prop 8, the CA residents are kind of having best of both ways. Prop 13 doesn't allow the accessed value to go up in rising market as long as the ownership doesn't change while Prop 8 allows the accessed value to temporarily go down in declining market. –  amit_g Nov 29 '12 at 0:28
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