A bit of good news for 2010 property taxes

Most Los Angeles homeowners will see a small drop, rather than a hike, in next year’s property tax bills, thanks to an unprecedented drop in the “inflation factor” that county officials use to assess property values. The drop, which will save the owner of a $250,000 home about $62, will affect about 80 percent of Los Angeles property owners, according to Los Angeles County Assessor Rick Auerbach.

The savings “affects both residential and commercial property owners,” Auerbach points out.

The reduced tax comes thanks to an arcane formula built into Proposition 13, the property tax limitation measure voters approved in 1978. Under Prop.13, taxes can rise up to two percent in years when the federal Consumer Price Index jumps two percent or more. Unfortunately, it almost always does.

Not this year. Recently, the CPI actually dropped, and the “inflation factor” the state uses to help the assessor’s office determine real estate value flipped to become a “deflation factor.” So instead of seeing an expected jump next year of $55, the owners of that hypothetical $250,000 home will see an actual drop of $7 from what they paid this year. That makes a swing of $62. “It’s not just the decrease that helps,” says Auerbach, “it’s the lack of an increase.”

About 350,000 of L.A.’s 1.7 million homeowners won’t get the reduction. That’s because they already had their property tax bills reduced when the Assessor’s Office proactively recalculated the value of homes earlier this year in neighborhoods hard hit by the mortgage crisis.

Here’s the bad news: the small savings won’t show up until the fall of 2010. The 2009 bill that Los Angeles County residents received this fall showed the usual increase. This year’s calculation was made in 2008—before the economy had headed so far south.

And, while we’re talking that 2009 bill, if you haven’t paid already, don’t forget to send your first payment to the Treasurer Tax Collector to beat the December 10 final deadline.

After all, who wants to spend next year’s tax savings by forking over late penalties now?