L.A. County urged to quickly process tax relief claims

By Ben PostonStaff Writer

March 18, 2022 2:29 PM PT

State Sen. Bob Hertzberg called on the Los Angeles County assessor’s office on Friday to immediately process thousands of claims for property tax relief to end a backlog that has left some older homeowners facing hefty tax bills.

Proposition 19, narrowly approved by California voters in 2020, gives homeowners a significant property tax break when they move to a more expensive home. But a recent Times investigation found that delays by the assessor’s office in reviewing claims under the law have left property owners stuck with high tax bills that must be paid while they wait for their applications to be approved.

As of early March, the assessor’s office had not completed any of the 1,271 applications it had received to recalculate the property taxes for older and disabled homeowners under the law, according to the agency. And it hadn’t finished any of the nearly 3,700 applications for parent-to-child and grandparent-to-grandchild inheritances, the other major piece of the tax measure.

Hertzberg (D-Van Nuys), who authored a bill passed last year to clarify the law, said the processing delays identified by The Times are “what happens when government puts bureaucracy over people.”

The purpose of the law was to “protect seniors from exorbitant property tax bills if they decide to move,” Hertzberg said. Referring to the delays, he added, “This is 100% wrong.”

Hertzberg, 67, has said he plans to run for the L.A. County Board of Supervisors to replace retiring Supervisor Sheila Kuehl, who represents the 3rd District.

He said the 2020 ballot measure requires assessor’s offices to immediately send claims to the county treasurer’s office so that homeowners can be granted tax relief rather than wait for their applications to be approved.

L.A. County Assessor Jeffrey Prang disagreed, saying a claim has to be approved before a homeowner’s tax bill can be reduced. His office helped write the clarification language to improve Proposition 19 and is now “urgently working” to alleviate the financial impacts to property owners and moving the hardest-hit taxpayers to the front of the line, he said.

“But even now, well-intentioned lawmakers are saying the law can do things that it simply can’t,” Prang said. “Simple statements don’t fix a complex, sophisticated law that involves three different branches of the county’s property tax administration.”

L.A. County Treasurer and Tax Collector Keith Knox has said his office cannot defer or reduce property taxes until the assessor’s office approves the transfers. Taxpayers will receive a refund once the assessor does so, he said.

In a statement, the state Board of Equalization, which oversees tax collection, said Proposition 19 requires assessors to adjust the value of the replacement home when a claim is filed. However, the assessor must determine that qualifications are met before a property owner can receive a tax reduction, said agency spokesman Peter Kim.

In addition, if the replacement home is in a different county from the original property, the assessors of each county must share and verify information about the homes, Kim said.

Previously, Prang has said his office needed at least a year to update its technology to implement the measure after it was passed, but the law gave assessors only several months to do so. The legislation clarifying the law was passed and signed by the governor last fall. In the meantime, without clear guidance on how to administer Proposition 19 for most of last year, applications piled up, Prang said.

It will probably take months more to get through the backlog, Prang said. His office has been receiving more emails and phone calls recently from frustrated property owners like Rose Liebermann of West Hills.

Liebermann, a clinical social worker, owes the county almost four times as much as the taxes she had paid on her previous house in Granada Hills where she had lived for more than 30 years. Liebermann, 71, said she has called the assessor’s office to inquire about the status of her application for tax relief and was repeatedly told that the office was short-staffed.

“Seniors are being penalized for [the assessor’s] inadequacies,” Liebermann said. “If I pay my taxes late, I have to pay a fine. But is there no responsibility or consequences on their end? There should be something to allow for people’s lives to not be so devastated financially.”

The state controller’s office offers a tax postponement program that allows older homeowners to defer property tax payments if their household income is less than $45,810 annually and they have at least 40% equity in the home. But that wouldn’t help Liebermann.

Before Proposition 19’s approval, older homeowners had a one-time opportunity to retain their existing tax assessments if they moved to a home of equal or lesser value within the same county. They could do the same when moving between Los Angeles and nine other counties. If they didn’t meet those requirements or moved to a more expensive home, they would have had to pay the full amount in property taxes.

Under the new law, older homeowners receive a property tax benefit when they buy a more expensive home anywhere in the state. Their new tax is calculated using a formula that blends the taxable value of their previous home with the value of their new home. Homeowners with disabilities can get the same break, as can victims of wildfires and other natural disasters when they move from damaged homes.

Proposition 19 also restricted an inheritance property tax break that allowed the children of homeowners to keep their parents’ low property tax assessments. A 2018 Times investigation found a large number of inherited homes along the coast that are used as investment properties.

As part of the measure, children who inherit their parents’ houses will no longer receive a property tax break if they intend to keep it as a second home or rent it out.

Times staff writer Liam Dillon contributed to this report.