Homeowners aren’t the only ones looking for a break on their property taxes — San Mateo County officials are expecting commercial property owners to jump on the bandwagon in increasing numbers this year.
The county Assessor’s Office expects to review more than 1,000 commercial properties in the next few months for drops in their assessed values, up from 681 reviews last year, as they prepare the tax rolls for the fiscal year that begins July 1.
Any property owner can request a free “decline in value” review if they believe the market worth of their property as of Jan. 1 has dipped below its assessed value for tax purposes.
In each of the past two years, about 30,000 homeowners have been granted such requests. Last year, that reduced Peninsula home values by a combined $5.85 billion, resulting in an estimated $64 million less in tax revenue for local agencies.
Now officials believe the impacts are settling in for commercial properties, Deputy Assessor Joel Morris said. Some 528 “decline in values” granted last year caused commercial values to drop a combined $1.6 billion.
“Traditionally, what we’ve seen is after the residential declines, the commercial follows,” Morris said.
Further drops in the county’s $140 billion worth of property would mean less tax revenue for local governments, especially public schools, which get 44 percent of local property taxes.
Mike Moran, the managing partner for the Burlingame office of commercial real estate firm Cassidy Turley BT Commercial, said drops in Peninsula commercial property values aren’t surprising, with rents dropping and vacancy rates peaking at about 18 percent in late 2009.
But he said vacancy rates on the Peninsula are declining, fueled by a spurt in demand for large office spaces from tech companies. He predicted values will start to climb this year.
“We’re not out of the woods by any means,” Moran said, “but we definitely have passed the bottom of the market and are on the way back up.”
Property values on the Peninsula have declined in recent years.
|July 1, 2009||July 1, 2010|
|Residential properties reviewed||55,436||35,217|
|Residential decline in values granted||30,773||30,903|
|Commercial properties reviewed||629||681|
|Commercial decline in values granted||442||528|
|Reduction in residential assessed value||$4,892,638,475||$5,853,277,048|
|Reduction in commercial assessed value||$949,464,509||$1,613,811,476|
For more information on how to submit “decline in value” requests, visit www.smcare.org.
Source: San Mateo County Assessor’s Office