We recently received our property tax valuations in the mail and I always get one or two calls from clients who don’t  understand how the taxes are calculated.   A February 25, 2011 article in the Arizona Republic helps explain.

Here are some basics:  Full cash-value (FCV) is the figure that reflects a property’s current market value.  This number is used to calculate secondary taxes such as bonds, budget overrides and special districts such as fire and flood control.

Limited property value (LPV) is used to assess taxes for school districts, cities and community colleges and the county. It’s calculated using a complex formula set by the state Legislature and can’t be higher than a property’s FCV.  The FCV and various LPVs from your assessment determine your share of taxes.

Property taxes are determined through a formula based principally on property valuations set by the county assessor an tax rates set by municipalities and school districts.  Formulas vary from city to city but there is an average breakdown of how much different kinds of taxing districts factor into property taxes: special districts, 7%; community college, 10%;  county, 11%; cities, 11% and schools, 61%.  Financial decisions those groups make this summer will determine what property tax bills look like this fall.

The 18-month lag between property valuations and tax bills is built into the system so homeowners can appeal the values.  The deadline to appeal a Maricopa County property valuation is April 26.   Hope that helps!   For more information, go to www.maricopa.gov/assessor.

If you need to sell your home and the market value of your home is not sufficient to pay off the loans you have on your home, along with  the costs of the sale, you may have to contact a Realtor to help you with a short sale if you can’t pay the difference.

There are some things you want to consider because a short sale involves many issues and legal and financial risks.    Beware of predatory “rescue” scams and short sale fraud.  “Rescue” scams may cost you money and get no results.   Watch out for fraudulent schemes that a) guarantee to stop the foreclosure, b) have large upfront fees, c) tell you not to contact your lender, d) tell you to transfer the title or lease of the property, or e) tell you to executive a power of attorney.

There are options other than a short sale.  They include loan workouts,  loan modifications, refinance, deed-in-lieu of foreclosure, work-out sale, bankruptcy or foreclosure.    If you decide to pursue a short sale 1) Contact a qualified real estate professional, 2) Investigate documentation needed and eligibility, 3) Determine the amount owed on your home, 4) Determine the fair market value of your home, 5) Consult legal counsel, 6) Know that a short sale may not discharge the debt, 7) Obtain tax advice, Be aware of the impact on your credit score,  and 9) Understand that there may be a waiting period before you can buy another home.   Good luck!