Don't Mess With Taxes

I'm hoping that Mitt Romney's tax advisers open up storefront operations across America.

I'd give them a shot at my taxes since they've done not only a good job at keeping the expected Republican presidential nominee's federal income taxes low, but also at reducing his San Diego County property taxes.

Mitt and Ann Romney bought their palatial La Jolla beachfront home for $12 million cash in 2008. Then the housing market in Southern California, as elsewhere, tanked.

So the Romneys did what homeowners all across the United States have done and continue to do: Appealed their local property tax assessment.

The Los Angeles Times took a look at the county's public real estate records and chronicled the Romneys' property tax reduction effort:

"Initially, the Romneys asked that their 2009 assessment, $12.24 million, be reduced to $6.8 million, maintaining that their home had lost about 45% of its value in the first seven months they owned it.

Thirteen months later, after hiring an attorney to guide them, the Romneys filed an amended appeal, contending the home had suffered a less-dramatic fall of 27.3%, to $8.9 million.

They also filed an appeal for the 2010 tax year, claiming the house had dropped further, to $7.5 million, 38.7% less than the home's assessed value.

As a result, the Romneys have saved about $109,000 in property taxes over four years."

Good for them. A lot of people get excessive property assessments each year, fight them and win. I'm sorry for the services that suffer when tax collections are reduced, but county assessors need to get the evaluations of real estate right so the proper, lower taxes will be collected.

And yes, folks worth $250 million are as entitled to take all the tax breaks for which they qualify, be it tens of thousands of dollars saved on federal returns because of the type of income received or $49 in passive business activity losses for an Olympics-bound horse or around $100,000 saved on their home's property taxes.

"I would think it's foolish not to request a decline in value if you are entitled," Paul Habibi, a real estate finance and development instructor at the UCLA Anderson Graduate School of Management, told the LA Times. "That's like saying a rich man should not bend over to pick up a hundred dollar bill."

Whatever your income, if you want to follow the Romneys' example and lower your home's property tax bill, start by appealing your property's appraised value. 

You also might find these items of interest:

• Beware unsolicited -- and questionable --
  property tax payment plans
• North Dakota voters decide to keep
  local property taxes in place
• Marginal tax rates vs. effective tax rates,
  or what Mitt's and Newt's taxes tell us