When home prices fall, taxes can

The real estate and foreclosure crises have played havoc with property values in Atlanta.

Wide areas of south Atlanta and north Clayton, south Cobb and south DeKalb counties have seen so many bank-owned properties flood the market that values have plummeted across whole neighborhoods.

However, property tax appraisers across metro Atlanta admit they’ve struggled to keep pace with the decline in values across the region —- especially in ZIP codes hardest-hit by foreclosures.

That could leave thousands of metro Atlanta taxpayers paying more property taxes next fall than they should —- unless they take advantage of a little-known, rarely used option to file a residential property tax return.

“Traditionally, this has not been done,” said John O’Callaghan, CEO of the Atlanta Neighborhood Development Partnership, a nonprofit affordable-housing group. “Owners who believe the real estate slump has caused their property’s worth to drop below its appraised value for taxes need to know they have a way to make that case, and possibly lower their taxes.”

A residential property tax return allows property owners to contest a county’s valuation. Property owners can file one between Jan. 1 and April 1, proposing what they think is the property taxable value for their home.

The document then follows the same course as an appeal would, getting reviewed by staff and eventually the Board of Assessors.

Fulton Chief Appraiser Burt Manning said even with more than 330,000 parcels, the county gets only a handful of appeals every year. This year, Manning said he’s advising people who feel their values have slipped to file a return. He expects the number to explode.

“Why wouldn’t you file a form that says what you think your value is,” Manning said.

Real estate records show hundreds of properties for sale today at a fraction of their taxable values.

A quick search of records of homes for sale in Clayton, DeKalb and Fulton found numerous homes valued for taxes at several times their current sales price. Three randomly selected homes in each county, nine in all, were together valued for taxes $1,029,744.

Their combined sales value: $134,300 —- about 13 percent of the taxable value of all nine.

Assessors are required by law to set the value as what the property should be worth in a fair-market sale as of Jan. 1 of the year in question. However, they typically try not to use distressed sales as part of their calculations. And they rarely write down values.

But such actions may be required when setting values for 2009.

A recent study by Zillow.com found that across much of metro Atlanta, the average value of homes had fallen 5 percent to 8 percent. A detailed study of 15 high-foreclosure ZIP codes by the ANDP, a nonprofit, affordable-housing group, found that governments were way behind falling values.

The study found that residents in those ZIP codes had overpaid taxes for 2008 by more than $71 million. ANDP found the problems the most pronounced in Fulton, DeKalb and Clayton and beginning to take hold in Cobb and Gwinnett counties.

O’Callaghan said taxable values that are 50 percent to 75 percent higher than sales prices are common in areas overrun with foreclosures and abandoned housing.

He’s advising property owners to file returns in early 2009.

“When you put in a value, it will force the assessors to deal with you on an individual basis,” O’Callaghan said. “If enough file these property tax returns, that can have an impact on the entire neighborhood.”

HOW TO FILE

Owners who believe their property’s worth is below its appraised value for taxes can possibly lower their taxes by filing a residential property tax return.

Owners can contact their county tax assessors directly or go to their county’s or county tax assessor’s Web site, where forms can be downloaded. Filing between Jan. 1 and April 1, owners can declare what they think is the true taxable value of their property.

The property tax returns then go through the same course an appeal would, getting reviewed by staff and eventually the county Board of Assessors.

BROAD APPRAISAL DISCREPANCIES

County tax appraisals and sales prices often show wide disparities, especially in communities hit by high number of foreclosures. Here’s a sample of some low-cost homes for sale in metro Atlanta compared with their current taxable values.

COUNTY….ADDRESS/CITY/ZIP ………………LIST PRICE ..TAX VALUE

Clayton ..1574 Wren Road Jonesboro 30238……..$19,900….$98,815

Clayton ..800 South Ave. Forest Park 30297……$15,900….$69,661

Clayton ..1252 Willow Drive Riverdale 30296 ….$14,900….$80,368

DeKalb….3037 Alston Decatur 30032 …………$19,900 ..$148,700

DeKalb….3128 Charity Drive Atlanta 30316……$16,900 ..$108,900

DeKalb….1131 Fleetwood Drive Atlanta 30316 ….$9,900….$46,000

Fulton….1063 Ashby Grove Atlanta 30311……..$20,000 ..$232,600

Fulton….323 Mt. Zion Road Atlanta 30354 ……$10,000….$76,300

Fulton….866 Fox St. Atlanta 30318…………$168,400 ….$6,900