It's been slow going, but perhaps real progress is being made in the fight against unfair property tax assessments. As we've described in the past, current property tax law dictates that when a house sells, the value assessment can be caught up to "current value", meaning many folks in the last couple of years have purchased homes only to see their property taxes increase anywhere from 50% to 200% (yes - we've seen real life examples of 200% increases).
There is an attorney in town who has won a court case in which the courts found this tax treatment is unconstitutional. Unfortunately, as I understand it, the ruling pertains specifically to her case and therefore does not directly affect the state law. BUT, another case has just been decided in favor of the tax payer; and so it appears there may be some momentum being gained. Read the following excerpt below which we took from an email we received:
GREAT NEWS! A second district court judge, Judge Nan Nash, just ruled that our property tax law is unconstitutional - see attached from Stephanie Dzur for details ...
Hi Mark:
I'm attaching a copy of the judicial decision in Ying Wang's case. I am really excited for Ying Wang in winning his case on appeal in District Court! He is to be congratulated in his victory considering he represented himself in his protest and on appeal. Not an easy feat for someone without a legal background.
The opinion by Judge Nan Nash follows the same reasoning as the earlier decision in my case, Dzur v. Montoya. The New Mexico Constitution requires the legislature to limit the annual increases in the valuation of residential property. The Constitution specifically allows the legislature to treat people differently in applying the limitation as long as the different treatment is based upon owner-occupancy, age or income.
In Ying's case the Court held that the New Mexico Constitution is violated by assessing a class of taxpayers differently (denying them the valuation limitation) because of when they bought their property. The Constitution requires taxpayers to be treated equally with only three permissible exceptions: owner-occupancy, age or income.
Clinton Marrs and I are representing taxpayers who have been hit by the so-called Tax Lightning statute in 2009 and earlier years. The property tax bills go out November 1st, and we have just a very short time after that to file complaints on behalf of taxpayers. I am available to answer questions! So please do not hesitate to call.
Stephanie Dzur, Attorney
3916 Juan Tabo Pl. NE, Suite 25
Albuquerque, NM 87111
505-730-5295
sdzur1@gmail.com
Showing posts with label property tax increase. Show all posts
Showing posts with label property tax increase. Show all posts
Thursday, October 15, 2009
Tuesday, September 15, 2009
"Tax Lightning"
Some of you may have noticed the article in this past Sunday's ABQ Journal about the property tax mess in NM. Specifically, new homeowners are getting hit hard with much higher property tax bills than their neighbors (none as tax lightning). This is something we educate clients on all the time, and have posted about several times here. It is a mess and, in our estimation, completely unethical (at best).
Well, Judge Theresa Baca of the state's 2nd Judicial District apparently agrees as she has deemed this as unconstitutional. So now what? Here are some of the highlights of this article:
1. The ruling only affects Bernalillo County, since that was the district where the ruling took place. So if you are in, say, Rio Rancho then you need to fight.
2. Hopefully others will follow with suits since this has happened. At least the State Legislature should immediately tackle this issue now that this ruling has been handed down.
3. If you bought your home in 2008, then you are about to get your first updated tax bill. You have a 60 day window to fight this. You should immediately protest it. In fact, the attorney who just one this suit in court suggests you "file a lawsuit within 60 days seeking a refund". Do not be ignorant of this window. Deal with it immediately or you will make it more difficult on yourself.
4. If you bought your home prior to 2008, then you should ask the court to roll their assessed value back to what it should be. This is unproven at this point, but with this ruling it is worth the fight.
Well, Judge Theresa Baca of the state's 2nd Judicial District apparently agrees as she has deemed this as unconstitutional. So now what? Here are some of the highlights of this article:
1. The ruling only affects Bernalillo County, since that was the district where the ruling took place. So if you are in, say, Rio Rancho then you need to fight.
2. Hopefully others will follow with suits since this has happened. At least the State Legislature should immediately tackle this issue now that this ruling has been handed down.
3. If you bought your home in 2008, then you are about to get your first updated tax bill. You have a 60 day window to fight this. You should immediately protest it. In fact, the attorney who just one this suit in court suggests you "file a lawsuit within 60 days seeking a refund". Do not be ignorant of this window. Deal with it immediately or you will make it more difficult on yourself.
4. If you bought your home prior to 2008, then you should ask the court to roll their assessed value back to what it should be. This is unproven at this point, but with this ruling it is worth the fight.
Tuesday, February 10, 2009
Property Taxes in New Mexico
Many of you may have read our past posts about what is going on with our property tax situation in New Mexico. In short, folks are getting taxed out of their homes due to doubling and even tripling taxes. Below is a letter I wrote to the Senate Corporations Committee, who will be evaluating bills designed to correct the mess. After the letter, please note the applicable bills and the legislators who are on the committee. If you can make the time, particularly if you've been affected or know someone who's been affected, please contact one or all of the committee to voice your concern.
Dear Senators,
Given the amount of time being committed and the number of related bills, it’s obvious there is an understanding in the legislature of the enormity of the property tax issue. I’m hopeful that the legislature will see the necessity of passing the bills noted below.
Being in the mortgage business, we’ve seen numerous examples of the negative impact of the current property tax environment. I thought I’d share at least one specific example that I believe speaks volumes. This is literally from a call I took from a client TODAY. It’s not a coincidence that the call came in today, we receive calls like them all the time.
The call was from a client in California who purchased three homes here in Albuquerque in 2006. A client who has had to cover over $1,200 per month to cover the amount of the mortgage payments in excess of the rents being collected; and he’s done so for over a year and a half. He called me today because he received a notice from the lender on ONE (others will follow soon I’m sure) of the homes letting him know that he owed them over $2,500 due to a shortage in his escrow account. If he didn’t pay the lump sum, his payment would increase a total of $375.00. If he did, it would still increase by over $200 per month.
His dilemma centers around the fact that he believes morally he made an obligation to pay for these homes, which is why he’s continued to pay the $1,200 per MONTH beyond what is coming in for rent, even though a part of him thinks there is no reason to continue paying the mortgages. However, the latest development regarding the property taxes has created a situation where he may not have a choice. He’s now thinking that his best option is to let the homes go in to foreclosure. His thinking is why wait for values to come back up AND pay anywhere from an additional $300 to 600 more per month for the three homes combined?
Certainly no one expects you to have sympathy for this person because he bought some investment property here in Albuquerque and isn’t able to collect enough rent to cover the mortgage payments. These are the consequences of the decision he made. The point is that the current property tax environment has impacted him in a way that will likely cause these homes to go in to foreclosure, whereas most likely he would have chosen to continue on in hopes of a turnaround in the housing market. I think you would all agree this is the type of scenario we as a community need to avoid if at all possible.
It’s a good thing rates have gone down allowing folks to refinance. In doing so, many have been able to at least keep their payment the same after factoring in a recent or upcoming increase in their payment due to the property tax increases. In this clients case this is not an option because these are investment properties.
I appreciate your attention to this very important issue and look forward to significant progress being made.
Bills:
1. SB 181 - this will keep the 3% cap in place regardless of change in ownership, preventing future tax lightening.
2. SB 335 - regarding vacant land, this will change the tax ratio for valuing non-agricultural land from 1/3 to 1/6.
3. SB 457 - this will rollback the valuation of properties that have been hit by tax lightening.
4. SB 458 - regarding new construction, this will value new homes at 80% of sales price.
5. HB 34 & 261 - these would require disclosure of a property tax increase to future homeowners.
6. SB - to be introduced next week, this would reset property taxes to current and correct values with a 4-year phase in for homeowners that experience a tax loss or increase. After the reset, the 3% cap would be reinstalled.
Senators:
Phil Griego: senatorgriego@yahoo.com
Lynda Lovejoy: lynda.lovejoy@nmlegis.gov
Kent Cravens: klcravens@alphagraphics.com
Dianna Duran: dianna.duran@nmlegis.gov
Tim Keller: tk@timkellerfornewmexico.com
George Munoz: munozgeo@gmail.com
John Sapien: john.sapien@nmlegis.gov
Bill Sharer: bill@williamsharer.com
David Ulibarri: dulibarri60@zianet.com
Mark Boitano: BOITANOM@aol.com'
Dear Senators,
Given the amount of time being committed and the number of related bills, it’s obvious there is an understanding in the legislature of the enormity of the property tax issue. I’m hopeful that the legislature will see the necessity of passing the bills noted below.
Being in the mortgage business, we’ve seen numerous examples of the negative impact of the current property tax environment. I thought I’d share at least one specific example that I believe speaks volumes. This is literally from a call I took from a client TODAY. It’s not a coincidence that the call came in today, we receive calls like them all the time.
The call was from a client in California who purchased three homes here in Albuquerque in 2006. A client who has had to cover over $1,200 per month to cover the amount of the mortgage payments in excess of the rents being collected; and he’s done so for over a year and a half. He called me today because he received a notice from the lender on ONE (others will follow soon I’m sure) of the homes letting him know that he owed them over $2,500 due to a shortage in his escrow account. If he didn’t pay the lump sum, his payment would increase a total of $375.00. If he did, it would still increase by over $200 per month.
His dilemma centers around the fact that he believes morally he made an obligation to pay for these homes, which is why he’s continued to pay the $1,200 per MONTH beyond what is coming in for rent, even though a part of him thinks there is no reason to continue paying the mortgages. However, the latest development regarding the property taxes has created a situation where he may not have a choice. He’s now thinking that his best option is to let the homes go in to foreclosure. His thinking is why wait for values to come back up AND pay anywhere from an additional $300 to 600 more per month for the three homes combined?
Certainly no one expects you to have sympathy for this person because he bought some investment property here in Albuquerque and isn’t able to collect enough rent to cover the mortgage payments. These are the consequences of the decision he made. The point is that the current property tax environment has impacted him in a way that will likely cause these homes to go in to foreclosure, whereas most likely he would have chosen to continue on in hopes of a turnaround in the housing market. I think you would all agree this is the type of scenario we as a community need to avoid if at all possible.
It’s a good thing rates have gone down allowing folks to refinance. In doing so, many have been able to at least keep their payment the same after factoring in a recent or upcoming increase in their payment due to the property tax increases. In this clients case this is not an option because these are investment properties.
I appreciate your attention to this very important issue and look forward to significant progress being made.
Bills:
1. SB 181 - this will keep the 3% cap in place regardless of change in ownership, preventing future tax lightening.
2. SB 335 - regarding vacant land, this will change the tax ratio for valuing non-agricultural land from 1/3 to 1/6.
3. SB 457 - this will rollback the valuation of properties that have been hit by tax lightening.
4. SB 458 - regarding new construction, this will value new homes at 80% of sales price.
5. HB 34 & 261 - these would require disclosure of a property tax increase to future homeowners.
6. SB - to be introduced next week, this would reset property taxes to current and correct values with a 4-year phase in for homeowners that experience a tax loss or increase. After the reset, the 3% cap would be reinstalled.
Senators:
Phil Griego: senatorgriego@yahoo.com
Lynda Lovejoy: lynda.lovejoy@nmlegis.gov
Kent Cravens: klcravens@alphagraphics.com
Dianna Duran: dianna.duran@nmlegis.gov
Tim Keller: tk@timkellerfornewmexico.com
George Munoz: munozgeo@gmail.com
John Sapien: john.sapien@nmlegis.gov
Bill Sharer: bill@williamsharer.com
David Ulibarri: dulibarri60@zianet.com
Mark Boitano: BOITANOM@aol.com'
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