State Senator Bob Hertzberg on Friday asked the Los Angeles County Assessor’s Office to process thousands of property tax relief applications expeditiously to end a backlog that has left some older homeowners facing hefty tax bills.
Proposal 19, narrowly approved by California voters in 2020, gives homeowners a significant property tax reduction if they move to a more expensive home. However, a recent investigation by the Times found that delays by the Adjudicator’s Office in reviewing claims under the Act have left property owners facing hefty tax bills to be paid while they wait for their claims to be approved.
As of early March, the appraisal office had not completed any of the 1,271 applications it received for statutory property tax recalculations for elderly and disabled homeowners, the agency said. And it hadn’t completed any of the nearly 3,700 applications for parent-to-child and grandparent-to-grandchild inheritances, the other big part of the tax measure.
Hertzberg (D-Van Nuys), who authored legislation passed last year to clarify the law, said the processing delays The Times found were “what happens when the government puts bureaucracy ahead of the people”.
The purpose of the law is to “protect seniors from exorbitant property tax bills if they decide to relocate,” Hertzberg said. Referring to the delays, he added: “This is 100% wrong.”
Hertzberg, 67, has announced that he will run for the LA County Board of Supervisors to replace retired Supervisor Sheila Kuehl, who represents the 3rd Circuit.
He said the 2020 ballot measure will require appraisal offices to send claims to the district treasurer’s office immediately so homeowners can receive tax breaks instead of waiting for their applications to be approved.
LA County Assessor Jeffrey Prang disagreed, saying a claim must be approved before a homeowner’s tax bill can be reduced. His office helped draft clarification language to improve Proposition 19 and is now “urgently working to mitigate the financial impact for homeowners and put the hardest-hit taxpayers on top,” he said.
“But even now, well-meaning lawmakers are saying the law can do things it just can’t,” Prang said. “Simple explanations do not solve a complex, elaborate law affecting three different branches of the county’s property tax administration.”
LA County Treasurer and Tax Collector Keith Knox said his office cannot defer or lower property taxes until the tax advisor’s office approves the transfers. Taxpayers get a refund once the appraiser does, he said.
In a statement, the state compensation agency, which oversees tax collection, said Proposition 19 requires appraisers to adjust the replacement home’s value when a claim is made. But the appraiser must determine that the requirements are met before a property owner can receive a tax break, said agency spokesman Peter Kim.
If the replacement home is in a different county than the original ownership, each county’s appraisers must share and verify information about the homes, Kim said.
Previously, Prang said it took his office at least a year to update its technology to implement the measure once it was passed, but the law gave reviewers just months to do so. The bill clarifying the law was passed and signed into law by the governor last fall. Meanwhile without clear instructions How to administer Proposition 19 For most of the past year, applications have piled up, Prang said.
It probably will take months longer to get through the deficit, said Prang. His office has been receiving more emails and calls lately from frustrated property owners like West Hills’ Rose Lieberman.
Liebermann, a clinical social worker, owes the county nearly four times the taxes she paid on her previous home in Granada Hills, where she lived for more than 30 years. Liebermann, 71, said she called the tax office to inquire about the status of her tax break application and was repeatedly told the office was understaffed.
“Seniors will be punished [the assessor’s] shortcomings,” said Liebermann. “If I pay my taxes late, I have to pay a penalty. But are there no responsibilities or consequences on their part? There should be something so people’s lives don’t get so financially devastated.”
The State Controller’s Office offers a tax deferral program that allows older homeowners to defer property tax payments if their household income is less than $45,810 per year and they have at least 40% equity in the home. But that would not help Liebermann.
Prior to the approval of Proposition 19, older homeowners had a unique opportunity to maintain their existing tax assessments when moving into a home of equal or lesser value within the same county. They could do the same when moving between Los Angeles and nine other counties. If they didn’t meet these requirements or moved to a more expensive house, they would have had to pay property tax in full.
Under the new law, older homeowners will receive a property tax benefit if they buy a more expensive home anywhere in the state. Your new tax is calculated using a formula that mixes the taxable value of your previous home with the value of your new home. Homeowners with disabilities can get the same break, as can victims of wildfires and other natural disasters when moving out of damaged homes.
Proposition 19 also restricted an estate tax break that allowed homeowners’ children to keep their parents’ low property tax assessments. A 2018 Times investigation found a large number of inherited houses along the coast being used as investment properties.
Under the measure, children who inherit their parents’ home will no longer receive a property tax break if they intend to keep it as a second home or rent it out.
Liam Dillon, a Times contributor, contributed to this report.
https://www.latimes.com/california/story/2022-03-18/state-senator-calls-on-l-a-county-assessor-to-quickly-process-thousands-of-claims-for-tax-relief LA County has been urging it to process tax break applications quickly