Sonoma County residents who saw their home plunge in value now may face what a top county official calls a "mixed blessing" — the return of higher property values, which can lead to bigger tax bills.
About half of the county's homeowners might see their property taxes rise this fall by more than the 2 percent annual limit set by Proposition 13, Sonoma County Assessor Bill Rousseau warned Monday.
Those owners previously saw their property tax bills drop when home values fell sharply after the housing bubble burst in late 2007.
Now, home prices are rising again, and the Assessor's Office plans to post new values for each property in the county in August. At that point, it will report how much a homeowner's property tax bill will change. But Rousseau already is warning homeowners to brace for higher taxes when the county sends out tax bills in October.
"We want to see people get prepared for that," he said.
In the past five years the county has reduced the assessed value of properties by a total of nearly $10 billion. That resulted in a cumulative drop of almost $100 million in collected property taxes.
More than 55,000 property owners — about half of the homeowners in Sonoma County — had their assessed values and property taxes temporarily reduced during that period.
If those owners' home values now have increased, "there's a high probability that their property taxes will rise as well," Rousseau said.
The county's median home price hit a record high of $619,000 in August 2005, then fell 51 percent to $305,000 in February 2009. By this April, the median had climbed back 43 percent to $435,500.
Rousseau wouldn't characterize how much property assessments will increase, which are based on the properties' fair market value as of Jan. 1 each year.
The county's new budget projects an increase of less than 1 percent in the total of all residential and other property taxes to be collected in the coming fiscal year, generating $180 million in total revenue.
But total property tax revenues may go up more than 1 percent, Rousseau said, saying the projection was conservative.
Home prices have risen much more sharply than 1 percent in the past year. Last year, the value of non-distressed properties increased almost 14 percent, according to CoreLogic, a real estate information service. And Rousseau said data from the local real estate listing service suggests the median home price in the county rose about 10 percent year over year.
So will the increases be closer to 1 percent or 14 percent? Ross Liscum, an alternate member on the county Assessment Appeals Board, said the answer is too difficult to declare.
"As they say, just stay tuned," said Liscum, a broker associate at Century 21 Northbay Alliance in Santa Rosa.
About half of the county's homeowners can expect their property's assessed value to increase by no more than 2 percent. That is the maximum allowed by Prop. 13, the tax-cutting initiative approved by state voters in 1978.
But for property owners whose taxes went down — often those who bought at or near the top of the market — the increases in the assessed value now can be greater. And if prices keep rising, the assessed value can continue to increase each year until it reaches what it would have been under the Prop. 13 rules.