Property Tax Lightning Update

We just received this email from Mark Boitano. He is one of the main State Legislators who has been fighting this issue. As we read through this we were reminded of several things:

1. Our government (both State and Federal) continues to demonstrate an inability to project what consequences will arise from their half thought out, uneducated decisions. Shame on every one of them, and shame on us if we put up with it.
2. Our government continues to demonstrate a slowness and cluelessness on fixing the problems they created in the first place. As we always say, "You can't help stupid."

That said, we credit Mark for his persistence to try and fix something that was clearly bad, unfair, and unwise from the start. We can hear his frustration in his note; and who could blame the guy when he has to deal with these ignoramuses daily. Fight the good fight, Mark.

Dear Friends of Tax Fairness,
It's 1:45 am and we're still debating bills on the Senate floor. Tonight, we passed two bills aimed at fixing property tax lighting. One bill is better than the other, but neither of them is the perfect solution. Unfortunately, I don't think we are going to pass an ideal bill. So I've decided to support both bills.

SJC Sub SB 160 - Sen.
Neville. This bill brings all properties to a current and correct valuation within 5-years through a phase up for those under accessed and phase down for those hit by tax lightning. After working on this issue for three years and seeing 12+ bills attempting to fix the problem, I believe this is the best we can do to equalize values. The "correct" fix for those hit by tax lightning is *not* something that the entire legislature will pass (plain and simple).

SB 46 - Sen. Eichenberg. This bill says that beginning in 2011 the 3% cap would stay in place regardless of a change in ownership. This bill does nothing to equalize the present disparity, but would prevent future tax lightning.

These bills passed the Senate and are going to the House. Presently, they are positioned to pass a memorial that says we should "study the problem". Please contact the House and strongly encourage them to act on a tax lightning fix and support Sen. Neville's bill. It is the best bet for a tax lightning fix.

Mark Boitano

Tax Lightening Fixed?

It's been a tough few years for folks who've purchased new homes in the Albuquerque Metro area since around 2004 due to the change in the states property tax laws that occurred in 2001. As many of you know all too well, the law change allowed counties to adjust values to "current" upon a change of ownership, as opposed to the previous law which capped the annual increase at 3%. As a result, thousands of homeowners were hit with huge property tax increases, sometimes as much as double or even triple.

Well, most assuredly due to the recent court cases in which two separate judges ruled the current property tax law violates the state constitution, Bernalillo County Assessor Karen Montoya has said she is going to roll back property values to the 2002 values. However, this will not take affect until the 2010 tax year, meaning many folks will continue to be overcharged for property taxes for the 2009 tax year.

As a result, there seems to be some momentum building for at least a couple of class action lawsuits, in which the plaintiffs and their attorneys are asking that they be repaid for hundreds and sometimes thousands of dollars that have been overcharged. Apparently, Montoya has commented that she feels the "system is inequitable" and that the issue needs to be addressed by the state. Therefore, there is some question as to whether Montoya and the assessors office will contest the lawsuits.

If you've been affected by tax lightening, and would like to inquire as to how you might recover some money, you can contact the attorneys office of Clinton Marrs and Stephanie Dzur.

Tax Lightening in NM

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

"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.

Property Tax Update

For those of you who have been nailed by are "lovely" state legislature regarding the rediculous increase in property taxes then you need to get today's ABQ Journal. The lead story on the front is how a District Judge has ruled it unconstitutional, which is a huge victory for those of us who have been fighting and complaining about it. Be sure and check it out to stay up to date.

Protesting Property Taxes

If you are one of many in a situation where your property taxes have recently (in the last couple of years) gone up some ridiculous amount then you need to be aware of a couple of things.

1. May 1, 2009 is the deadline to protest any increase. If you have questions on how to do that you can call us, look at the back of your "Notice of Value" that you would have already received, or call 505-222-3700.

2. We found a company helping you fight the City. They are Double Eagle Property Tax & Real Estate. Contact Dave Boyd at 883-1414. The way they work is they will "negotiate" with the City what they feel your tax rate should be based on other properties in your area. They charge you nothing if they fail. If they succeed, and they say it works the majority of the time, you owe them 20% of whatever the amount they saved you is. For example, if they save you $1,000 in taxes then you owe them $200. It is worth the fight, believe me, if they can save you that money. So go get 'em

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'

Property Tax Time

It's time to pay our property taxes again. Something most of us have our mortgage lenders do for us twice a year. So, we thought we'd shed some light on the process as a result of some phone calls we've received recently from concerned clients.

Our property taxes are due semiannually in New Mexico, on April 10th and November 10th of each year. They are considered delinquent if not paid by May 10th or December 10th. The vast majority of homeowners (who have a mortgage) have their property taxes escrowed, meaning every month when you make your mortgage payment, it includes an amount that is placed in a separate account so the money is available for the taxes to be paid when they come due.

Each year in late October, early November, the county sends out the Property Tax Bill for the upcoming year. So you should have received the bill for the 2008 property taxes by now. This can be a little confusing because the bill is sent to your home, and even includes payment coupons, which makes it seem like the county is expecting you to pay the taxes. BUT, the county ALSO sends the bill to your mortgage lender (or servicer), which the lender/servicer will use to make the biannual payments. You will notice on the top third of your bill (just to the bottom and right of the address section), there is a notation for "SENT TO #", which is the lender or servicer handling your escrow account. Don't be alarmed if you don't recognize the name. Many lenders use third party entities to manage these escrow accounts and related payments.

So, please don't be concerned by the bill you received. It is normal protocol that you should receive it, and the lender/servicer will be paying the taxes.

That said, we think it's a good idea to go to the county's website and verify that the taxes have been paid. If you'd like us to do that, we'd be more than happy to - just give us a call. We love to hear from you anyways, and want to serve you in any way we can. Or, if you prefer, you can go to:

http://www.bernco.gov/property/default.asp?qpaction=search_form&type=parcel

There you will enter the Parcel Number, which you can find at the top left corner of your bill. If you don't have your bill handy, you can also search for your property by situs address (just click this link from the site mentioned above). Situs address is simply your very basic address. For example, if your address is 1234 Willow St. NE, you would only enter 1234 and Willow. Any more than that and it won't find your home. Upon searching, you'll click on the Parcel # and it will go to your home's "file". Here you'll click on Tax and Payment History and you'll be able to see whether your current taxes have been paid. (This is for Bernalillo County only. For Sandoval and most other counties, you'll need to call the Treasurer's office to see if your taxes have been paid). It probably doesn't make sense to check until middle to late November.

Something to keep in mind: it's not uncommon for the account to reflect an unpaid balance even after December 10th. This is because the county is inundated with payments and it takes them a while to get them posted to the system. You can also call your lender, or log in to their website to see if they've disbursed your tax payment.

And again, don't hesitate to give us a call and we'll help you figure all this out.

Property Tax Crisis

In case you haven't noticed, property taxes have been skyrocketing in the Albuquerque area over the last couple of years. The root of this issue is a law (HB 366) that was passed in 2001, which, by the way, some have argued is unconstitutional. This law provided existing homeowners with protection of a 3% cap on the annual increase in their property taxes. That's a great deal if you plan to be in your house forever; but, if you decide to move, most likely you're in for a huge surprise.

You see, once a home sells, if it's subsequent to the 2001 law, the assessed value of the home purchased will be adjusted to current values. Seems reasonable one might conclude. The problem is that we just had a significant run up in values, much of it inflated, and as a result we've seen property taxes jump 100, 200 and even 300%! That's right, 300%!

We recently attended a meeting of the Revenue Stabilization and Tax Policy Committee, a committee of the NM State Legislature. At this meeting the committee heard from several citizens who have experienced these tremendous increases. Citizens who have been severely impacted by property tax obligations that have increased by hundreds of dollars. While we all understand we should pay our fair share for the government services we need, the problem is that those folks who have purchased their homes since 2001 are paying more than their fair share; significantly more. One of our state representatives, Mark Boitano from here in Albuquerque, has been working dilegently to have the inequity corrected through his participation on this committee, but he needs the help of the community to do so.

On the one hand, it was a little disappointing to hear some of the rhetoric out of the beaurocrats who spoke at this meeting - they just didn't seem to get that this situation is having a significant negative impact on peoples lives; but on the other, enough folks expressed their concern, especially during the public comment period, that the committee has finally agreed to take this more seriously in terms of exploring ways to correct the problem (there are several solutions on the table).

So, if you or someone you know has been affected, please let us know and we'll help you figure out how to get involved and help make the needed change.

Bernalillo County Property Taxes

We had an email exchange with some people regarding a question about property taxes in ABQ. As some of you may have noticed, if you have bought a house in the last couple of years, your taxes probably (undoubtedly) went way up for no apparent reason. Well here is our response to the question sent to us, and what you can do about this problem.

Their Question?

"I don't know if this applies in the Albuquerque Metro area or not (South to Belen, the East Mtns, Bernalillo, Corrales, RR or Albuquerque proper). Do the property taxes vary between these areas? And are there site(s) online where you can put in an address and get an estimation of your property tax liability for buyers looking at various neighborhoods/cities?

(Out in California (where I live today) the taxes can vary dramatically depending on location, that is why I am asking this question)"

Our Response:

"Everything said here is correct (somebody else had already chimmed in here). It is going to be different from neighborhood to neighborhood. In fact, it is often way different from neighbor to neighbor now due to an idiotic tax law that was passed by our state (primarily Ben Lujan in 2001). The summary of this is...we used to be a non-disclosure state. We are now not full disclosure, but we have to certainly disclose more. One of those things is the value of a house when you purchase it.
The problem is they are unfairly hiking people's property taxes after they purchase a home. It is a huge ordeal that is now being fought at the State Legislature. I have clients where their taxes went from $2,500 to $5,000; they doubled. Yet their neighbors are grandfathered in because they already owned the house before the law passed. I can tell you from personal experience with clients that people have gone into foreclosure over this because they cannot afford the increased payment. And I had one client completely back out of a purchase because the taxes had just gone up from when the house was listed to when it was under contract (they learned it half way through the transaction).
If you or somebody you know is negatively affected by this you need to call State Representative Mark Bointano at 505-299-6275. He is spearheading this fight.
Lastly, regarding a website to visit for property tax info, click here and you will be taken to the Bernalillo County site where you can look up tax info on any home by address in Bernalillo County."

You Should Not Buy A Home Now, Right?

Simply put...wrong. Despite all the garbage you are hearing in the meadia, right now is a great time to be buying a home.

1. We are entering the slow time of the season. Sellers are really ready to get their homes sold.
2. There are alot of homes on the market. Sellrs are more willing to negotiate because of the competition.
3. Rates are low still.
4. There is still money out there to lend, we assure you.

As a result, we want to let you know that we’re having a free Home Buyers’ Seminar on Saturday, October 18, at 9:30 AM. Please forward this to your friends, neighbors, family members, and coworkers who might benefit from learning the process of buying a home, or who just need to chat about the market and buying a home in this market.

The class will save you time, money, and worry. Here are a few of the topics:

• Understanding your credit score.
• What Lenders are looking for when approving you for a home loan.
• Information on how to buy a home with low down payment.
• How to get pre-approved to buy a home that you can afford.
• Help answering the question, “Am I ready to buy a home?”
• How to choose the right real estate and mortgage consultants.

You’ll leave this free seminar with a clear vision of how the process comes together, as well as a free Home Buyers’ Handbook for easy reference.

Date: Saturday, October 18, 2008
Location: 6767 Academy Rd NE, Coldwell Banker Legacy office (on Academy between San Mateo and Wyoming, across from the Aroyo Del Oso Golf Course)
Time: 9:30 AM – 11:30 AM

Please register for this seminar at 888-642-0013, ext. 16, or email info@MyPremierAdvisors.com.
• Plan to arrive about 10 minutes early to grab a good seat.
• Seating is limited. If you do have to cancel once you’ve registered, please notify us immediately so we can free up the seat for someone else.