It seems only fitting that on this Monday, the day before an important Presidential election, that we should turn our attention to the important issue of property taxes.
Don’t you think our property taxes are too high? Don’t you agree with those campaign ads urging you to VOTE NO! on propositions that would hike our tax rates?! Don’t you want to send a message to the professional pols who are oblivious to the plight of patriotic, hard-working Americans?
As it turns out, brothers Adam and Jeff Berkson started EasyTaxFix.com, an online business intended to help homeowners throughout San Diego County lower their property taxes. Adam, 34, and Jeff, 31, figured they’d prove their business concept in San Diego, and then expand their startup throughout California and the rest of the country.
But their startup has had a slow start.
“We really thought we were going to blow this out,” Adam says.
So what’s the problem?
“We’re getting a very low response rate,” Adam says.
It’s not like local homeowners couldn’t save money on their property taxes.
Adam estimates that roughly one out of every four homes in San Diego County is potentially over-assessed for the 2008 property tax year, based on a study they did before launching EasyTaxFix.com. That means those homeowners will likely pay more than they have to in property taxes.
With about 900,000 homes in San Diego County, Adam says that means the tax rate for more than 200,000 homes is based on a valuation that was established before the bubble popped. As San Diego news organizations reported just last week, a widely followed index showed home prices in San Diego County had plunged 25.8 percent in August compared to the same month last year. Prices nationwide are down 17.7 percent.
Adam estimates the average potential property tax savings for the one-in-four homeowners affected by this plunge at $1,000 a year.
So why aren’t people using EasyTaxFix.com to request a reduction on their property taxes?
Either they don’t know about it, or perhaps they just don’t care.
One factor could be that the Berkson brothers only began building their Web site in August, with Jeff doing much of the software development. They funded the rest of the site themselves, and launched EasyTaxFix.com in mid-September.
The site allows homeowners to log on and check for free whether their property is likely eligible for lower 2008 property taxes. It then costs $30 to use the site to automatically submit the required appeal forms electronically to the county assessor’s office.
But driving traffic to the site has proved problematic. “We’ve tried radio,” Adam says. “We’ve tried a search engine campaign.”
It is important to note at this point that homeowners can independently file their own request for a reduction in property taxes. The forms are available from the San Diego County Assessor here. Adam contends that process is too cumbersome.
In any event, only about 15,000 homeowners have filed a 2008 property tax appeal as of Oct. 27, but time is running out, Adam says. The deadline for San Diego County homeowners to request a reduction in their 2008 property taxes is Nov. 30.
Last year the assessor’s office got 13,150 such filings, Adam says.
So why the low turnout, so to speak?
“I don’t think people realize that their property tax is based on the valuation of their property,” he says. In San Diego County, property taxes are set initially at 1 percent of the home purchase price. Taxes can then increase a maximum of 2 percent a year under the tax increase limitation set by Proposition 13 in 1978.
Most of the homes with potential over-assessments have been purchased in the last few years.
Another reason might be that San Diego homeowners might not realize how much the value of their homes have plunged, Adam says. Or maybe they pay their property taxes through an escrow account, so they’re not really paying close attention to how much property tax they’re paying.
The Berkson brothers can only speculate—and maybe hope the unfocused energy driving all that angry voter rhetoric could somehow get channeled to motivate homeowners to lower their own property taxes. That could be a real taxpayer revolt.
