DATELINE SANTA FE

Tax Man Cometh

April is tax time and due to the overwhelming response we received from our last post regarding property tax protests we realized that a follow up was in order. There were a number of re-occurring questions so we will start with those and hopefully add some insight to how property tax works in Santa Fe.

Readers with questions about how property taxes are determined will want to go to their mailboxes this April and look for your Notice of Value. Not a tax bill, the notice of value describes your property then identifies it by tax parcel number. The different classifications that affect your taxes will be summarized such as class of property, exemptions, adjustments, and so on. You will find values for both land and improvements. For residential properties, these are market values based on sales of comparable homes.

If you do not receive a notice of value you will need to contact the Assessor’s Office. New Mexico is a self-reporting state, which means that if you do not receive a notice of value it is your responsibility to contact the Assessor’s Office. They have just begun working with a new mass appraisal software program and have a few kinks to work out so you may find errors or discrepancies on the notice. If you believe any of the information is incorrect you have 30 days from date of mailing to report them.

Assuming that the information is correct, the next step is to determine the tax.  Once adjustments are made, the new amount is multiplied by the millage or mill rate. Mill rates differ by school district and in Santa Fe County we have 4 school districts. Mill rates are higher for commercial properties than they are for residential and they go up or down depending on projected government budgets and the size of the tax roll, therefore if there is a budget shortfall the mill rate may be raised to close the gap. For the city of Santa Fe the effective tax rate is currently about $671.07 per $100,000 of assessed value. A helpful formula would be: Market Value /100,000 X $671.07. So, if you buy a million dollar home in Santa Fe your taxes should be around $6,710. 07.

If you are wondering why taxes seem to still be going up even when market values have gone done here is one explanation. Due to inconsistent market adjustments by previous Assessors there is a great disparity in valuations and many properties are assessed below market value. A 1978 statute required the Assessor to value all property at 100% of its market value but in 2003 new legislation put a 3% cap per year as the maximum amount a homeowner’s property tax could be increased. So here’s the twister, if market values drop 10% but your property is assessed 20% below market value, your taxes are still subject to a 3% increase.

The 3% cap is removed once a property sells and after each sale an affidavit affirming the sales price is sent to the Assessor’s Office establishing the market value for that property. This creates a new problem referred to as “Tax Lightening” because of the jolt the new homeowner gets when taxes are adjusted to market value. Every legislation session takes on this issue and there have been many proposals, such as rolling back everybody’s taxes to 2003 values, but as of this writing there has been no progress. We will follow up on this important issue in an upcoming post.

April 4, 2011 Posted by Carson & Carson | Realtor 121 | santa fe NM property tax | Leave a Comment