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Wednesday, October 28, 2009
$925,000 Home Has a $334 Tax Bill
By Thomas J. Cole
Journal Staff Writer
Under Great Homes and Destinations, The New York Times each week features three similarly priced homes on the market across the country.
The point of the feature is to show how much bang a home buyer can get for the buck in different places. Property taxes are listed for each home.
Last week in the Times it was "What You Get for ... $925,000," and one of the homes featured was in the village of Cerrillos, about 25 miles south of Santa Fe.
The 2008 property taxes for the home: $334.20
Let me repeat that: $334.20 in taxes on a home listed for $925,000.
The reason is that the home is appraised for property tax purposes at less than $64,000. The tax bill would be about $5,600 a year if it were appraised at its listing price.
The other similarly priced homes featured by the Times were in Maine (tax bill: $6,000) and South Carolina ($2,200).
Is it any wonder some people believe New Mexico is another country?
On the day the home was featured in the Times, the New Mexico Legislature was meeting in Santa Fe to address a $650 million state budget deficit.
Legislators ended up cutting $51.8 million from the budget for public schools as part of a deficit-reduction plan. Lawmakers offset that in part by allowing $29 million in school construction money to be spent instead on district insurance premiums.
In addition to the state budget, property taxes are another major source of funding for public schools.
Undervalued properties like the home in Cerrillos can make it more difficult for schools to increase their reliance on property taxes as a funding source.
"When we're looking for a place to raise revenues, that is probably a good place," said Sen. Cynthia Nava, D-Las Cruces, chairwoman of the Legislative Education Study Committee.
Undervalued properties also result in the tax burdens of some property owners being shouldered in part by others.
Public schools receive about 30 percent of the more than $1 billion in property taxes collected each year in New Mexico. Others sharing in property taxes include counties, municipalities, colleges and health facilities.
Santa Fe County Assessor Domingo Martinez said he wasn't surprised by the tax bill for the Cerrillos home but asked his staff to look into it.
"We weren't aware of any of the additions or improvements," Martinez said.
He said that when he took office in 2007, he inherited a backlog of properties that had never been put on the tax rolls and properties that hadn't been reappraised in several years.
Auditors for the state in 2008 reviewed a sample of 20 properties in Santa Fe County and found 14 were undervalued.
Santa Fe County — home to many of the most expensive residential properties in the state — is the second-largest county in terms of property values.
Under state law, a homeowner is required to report to the county assessor any improvement costing more than $10,000. Homeowners who don't make such reports can face criminal and civil penalties, as well as sizable bills for back property taxes.
Martinez said the state district attorney for Santa Fe County has offered amnesty from prosecution for homeowners who report improvements before the end of the year.
A history plaque on the Cerrillos home says it was originally build in about 1886 and restored over a 10-year period ended in 2004.
The home has three bedrooms and two baths. There also is a guest house and an art gallery. The total square footage is about 3,700.
According to the Times, the home features arched glass doors and hand-painted tiles from Mexico, as well as a fireplace mantel carved by hand in Bali. There is an interior courtyard, a gazebo and an outdoor eating area heated by an adobe fireplace.
The property fronts a dirt street in the old mining village, and it was cast as a general store in the movie "Young Guns."
According to Santa Fe County records, the tax bill for the property goes to Tom Morin, a sculptor whose work is featured in the gallery. A Fulbright scholar who studied in Italy, he can easily cover his property tax bill with the sale of a single piece.
No one was at the home when I stopped by Monday. Morin also couldn't be reached by telephone.
A caution to potential buyers of the hacienda: Martinez says the property will be reappraised and its taxes will go up.
UpFront is a daily front-page opinion column. Thom Cole can be reached in Santa Fe at 505-992-6280 or at tcole@abqjournal.com
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