South Bay Homes and Real Estate

Why haven’t my Taxes gone down yet?

A large number of Torrance homeowners haven been surprised by the quick decline in the value of their property. It should seem that lower Torrance property values would have one certain advantage: a decreased property tax. In most scenarios, though, this has not occurred.

In some scenarios, property taxes have done the complete opposite of owner’s expectations and gotten higher instead of lower. This confuses many of the South Bay homeowners who are unsure why they are required to pay more taxes on a Torrance house that has lost significant value in the past few years.

The explanation for this is related to the extremely complicated method for calculating property tax in Torrance and throughout California. A huge issue, even more so in Nevada, is a law that limited tax increases during the peak of the real estate market. The values of these areas are quickly falling, much in the way they rapidly raised a few years ago. Unfortunately, the decreased values have not made up the money difference of the increases during the boom. Statistics show that home prices will have to continue to plummet in order to have any hope of lower property taxes. Falling value has been problematic enough for Torrance real estate owners, but the prices have not fallen to levels that would result in lower property tax.

Proportional to the much higher percentage of foreclosures and unpaid loans, counties are finding that less people are paying property tax, as well. In Detroit, one of the worst real estate markets in the county due to foreclosures and lost value, unpaid property taxes are at a historical high. The loss of jobs and crumbling local economy are seen as the main reasons the real estate market has crashed so miserably.

Even homeowners who fully make their monthly mortgage payment could end up in foreclosure if they do not pay property tax for at least three straight years. In this scenario, the local government would auction off the house, at a price that would pay the county the balance of the unpaid taxes. Detroit is currently trying to reclaim hundreds of millions of dollars in taxes, and this issue continues in areas surrounding Detroit.

Guidelines to hold off Foreclosure:

Homeowners at risk of foreclosure can follow several guidelines to hold off the process:

• First, pay taxes even if foreclosure seems inevitable. Many people who are unable to make ends meet stop paying anything.
  
• Pay all that is possible, as some is better than none.
  
• Focus on the oldest taxes, as a tax that has gone unpaid for more than three years puts the homeowner at a great foreclosure risk.
• In some areas, you may be able to receive an extension for the reconciliation of your unpaid taxes. Certain members of the community may take pity if you can prove you have had an incredible hardship. Explore all options as soon as possible, as almost all applications have a deadline.
• Another alternative is to contact your bank or mortgage lender and see if they have any solutions available that would help you cover the cost of taxes. Banks want to avoid having the government take over their house, so they will usually try to help you avoid foreclosure. Remember that a type of program like this from the bank will put you in greater debt.

If you would like to learn more about how property tax is calculated for Torrance real estate please call me at 310-809-0203. Our office can help you figure out if you qualify for a property tax re-evalution.

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Torrance Home Buyer / Owner Options in Today’s Market