Property tax schemes pop up in Bay Area

April 13, 2009 12:00:00 AM PDT
Thousands of Bay Area property owners have been needlessly paying fees to get their property taxes lowered. Companies say they can get property taxes lowered, but for a fee. Officials say at least 1,000 Bay Area homeowners have fallen for the pitch and wasted a lot of money.

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Gardens bloom outside well-kept homes in Glynis Brooke's quiet Milpitas neighborhood. But, even this place is not immune to the housing crisis. Brooke has watched property values plummet all around her.

"A neighbor across the street who has her house on the market and I think she dropped her price $40, $50,000 within one week," she told 7 On Your Side.

So, it made sense when she got a notice in the mail saying her assessed value could be cut way down and she could save $1,730 in taxes.

"It kind of makes you believe that they're looking at the current value of your property and they're going to submit it to Santa Clara County and try to get the reduction," she explained.

All she had to do was pay $95 to Homeowners Tax Review of Pasadena by February 11th.

Glynis paid.

Santa Clara County Assessor Larry Stone says, "There is no reason to pay somebody for something the assessor provides for nothing."

Stone is very irked. He says Homeowners Tax Review and several other companies have been charging fees for a service the counties already give out for free.

"They're trying to be paid for something that we're doing and I think that's very deceiving and it's preying on the stress of a declining residential property market," he says.

Not only is it free to apply for a tax reduction, but most counties are doing it automatically because they know values are dropping.

Still, hundreds of distressed homeowners have fallen for these sales pitches, paying up to $179 each for a tax review. Some companies even charge a late fee to customers who do not pay quickly enough.

"There shouldn't be a need to have pay this exorbitant fee," says San Mateo County Deputy Assessor Angelina Hunter.

San Mateo County received 160 paid applications in one bundle. Contra Costa and Santa Clara Counties each received nearly 800.

"I'm a single mom," said Brooke, laughing. "A working single mom. That's probably one of the reasons I got trapped."

Stone says he will not even look at the applications until he finishes his automatic reductions. He says the people who paid are included in work his office is doing anyway.

"They should write to that company and ask for their money back," he said.

Brooke got on the phone right away, but all she got was 15 minutes on hold and a message machine.

7 On Your Side also contacted Homeowners Tax Review.

Co-owner Jeff Moffat says the company provides a legitimate service. He says many people do not have time to fill out forms and the $95 fee includes help with an assessment appeal if needed.

The company did not respond to 7 On Your Side's request for a refund for Brooke.

"We're already in a hard time right now. So to be doing this to people who are obviously looking for a way to save money right now is really a rotten thing to do," Brooke says.

District attorneys have been investigating these companies but in general it is legal to charge for these services. However, companies must make it very clear that they are not a government agency.

The bottom line is that homeowners can apply for a tax reduction for free. Use the links below for the free applications.

Decline in Value Forms for Reassessment for Bay Area Counties:


Alameda
Contra Costa
San Francisco
Santa Clara
San Mateo
Marin
Solano
Napa
Sonoma

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