Bernalillo County - Still Waiting for Court Decision on State Property Tax Cap

Bernalillo County residents are among a larger group of residents waiting for final direction from state courts about the constitutionality of the New Mexico property tax cap.

Albuquerque residents are among those in the county potentially affected by the final outcome of these court decisions.

In the 1990’s many states including California and Florida passed laws that prevent significant increases in the property tax assessment values of homes during booming real estate markets. New Mexico passed a similar law in 2001.

These laws put annual caps on how much the assessed values on homes can be increased. So during boom markets they do a good job of holding the line on massive property tax increases.

But there are two downsides that states like New Mexico are experiencing in the current recession.

First, homeowners who were protected from major valuation increases during the boom years don’t see the valuations fall fast enough when home values decline. That leaves homeowners wondering why the market value of their home has dropped 25%, but their property taxes only went down 5% - something that is happening all too often during the current recession.

The second and more significant problem that happens with property tax caps is that long time residents are protected from increases while new homebuyers experience sticker shock when they receive the first property tax bill on their new home.

The New Mexico property tax cap has created a situation where it is possible for two homes in the same neighborhood with the exact same square footage and features to have property tax bills that differ by thousands of dollars.

Not willing to tolerate this difference, Bernalillo County residents were among the first to challenge the New Mexico property tax cap in court. Since the first lawsuits were filed, thousands of other lawsuits have been filed across the state.

One thing that is never discussed about these lawsuits in news reports is that if they are successful, only two outcomes are possible. The first possibility is that the new homeowners are given lower home values and a property tax break. The more ominous situation that could happen would be that long time homeowners lose the protection of the property tax caps, and are hit with a massive tax increase.

Regardless of how these lawsuits turn out, Bernalillo County could be ground zero for massive property tax increases. If you live in Albuquerque, don’t leave it up to county officials to get the value of your home right.  Use ValueAppeal to appeal your Bernalillo County property tax assessment.