If you bought a San Diego County home at the height of rising prices in 2022, you might be getting a tax cut this year.

Home prices shot up in early 2022 — rising 30 percent annually as of March — only to come down quickly as interest rates rose. That means the tax bill for hundreds of new homebuyers, who bought from January to June 2022, could have been higher than the homes were worth when taxes were calculated this January.

Instead, the San Diego County Assessor’s Office already has reduced the bills of roughly 18,000 homeowners already — giving back $14 million. It’s possible some homeowners might have fallen through the cracks so the office is getting the word out that owners have until Nov. 30 to apply if they think they are eligible for a reduction.

Thousands of homebuyers from January to June 2022 saw market values drop by up to $100,000 this January. While the Golden State allows for tax reductions for value changes, San Diego County is one that reduces bills on its own without the owner filling out an application — so it’s possible thousands of San Diegans have already gotten letters informing them that their taxes are lower.

The tax change is only a temporary reduction because home prices started climbing again this year. Still, County Assessor Jordan Marks said the temporary reduction, even as low as $50 in some cases, makes a difference with inflation.

“For some folks, it means they save $3,000,” he said. “That could mean a lot for you and your family right now.”

The effort to provide temporary relief for home value decreases was passed as Proposition 8 in 1978, five months after Proposition 13, which capped annual property tax increases. A lot of California counties are giving out the tax cuts this year, especially in the San Francisco Bay Area, which experienced some of the biggest drops.

For example, Alameda County, which encompasses Oakland and parts of Contra Costa and Santa Clara counties, cut the tax bills of 8,300 homeowners, said CBS News, reducing the tax roll by more than $9 million.

Property taxes are used to fund public schools, first responders, road repair and other essential services. A temporary drop shouldn’t last long. If current trends hold, San Diego County home values could be near previous records by January.

The median home price in July reached $850,000, said CoreLogic, tying for the record high reached in May 2022. The median, as of September, was down to $830,000, but low inventory was still putting pressure on prices.

The application to apply for a tax reduction is on the county’s website. The address is: sandiegocounty.gov/content/sdc/cob/aab/forms.html.

Source: SDuniontribune by Phillip Molnar