Property values vary in Valencia County
It's a cozy, little peach-colored house on north Los Lentes Road and it's been home to Frank Gurule since 1970.
Growing up in the village of Los Lunas, Gurule eyed the little house set smack in the middle of the lot since he was a youngster.
"I remember as a kid I said, 'I'm going to own that place some day,'" Gurule said, smiling at the memory.
So what drew him to that house? Well as the old real estate wisdom goes, it was location, location, location.
When the house was built in 1959, the intersection of Los Lentes and Main Street was the center of town. And while commercial and residential development has shifted to and boomed on the west side of the village, Gurule's house is still strategically located near several desirable amenities.
There are three schools in the immediate area, three churches as well, not to mention being within walking distance of Main Street, where there are fast food joints, a family restaurant and small retail stores. And if someone was motivated, they could even walk to the Rail Runner station to catch the train.
The house sits on .63 acres and actually started life as a mobile home, Gurule says. It has grown to 1,209-square feet, according to county assessment records.
"It's cozy," Gurule said. "It's not much, pretty humble."
Sitting almost dead center on the lot, there is plenty of distance from his neighbors on the north and the south, a healthy distance from the traffic on the street and enough room behind the house to expand should the desire ever strike.
Gurule saw and considered all these things when he bought the property for an amount he can't quite remember.
"Maybe $20,000 — does that sound right?" he asks.
But one thing that never even crossed his mind were the property taxes.
"Never even thought about it," he said shrugging.
And they still aren't on his mind. Gurule's tax bill for 2013 was less than most people's monthly mortgage payment. Because he has kept the property for so long and qualifies for two tax exemptions — veterans and head of household — last year Gurule paid $421.92.
Compare that to a median residential assessment of $145,015 in Los Lunas and a tax bill of $1,677 after the $2,000 head of household exemption. Gurule's property has a net assessed value of $10,770 after his exemptions.
Gurule's humble home is just one of the thousands of residential properties in Los Lunas that have a cumulative taxable value of $241,497,311. And that is just a portion of the countywide $1.283 billion net taxable value of both residential and commercial properties.
With his mortgage paid, Gurule says while it is his home for the foreseeable future, the property is zoned commercial, which could make it a high-valued asset down the road.
"I think the taxes here are reasonable. I know they're lower in Belen but I think we have more services here," Gurule said.
He paused to consider the situation further.
"It could always be a lot worse," he said smiling.
Taxes are indeed lower in the city of Belen, coming in at 30.747 mills versus Los Lunas's 35.198, but the median assessment of a residential property in the Hub City is significantly lower at $73,112, which translates to a 2013 tax bill of $728 after a head of household exemption.
Each mill equals $1 per $1,000 net assessed value, so Belen property owners pay about $4.45 less per $1,000 than those in Los Lunas. Mill levy rates around the county vary depending on whether local agencies have enacted separate taxes for just themselves.
For instance, Los Lunas Schools makes use of a mill levy authorized by House Bill 33 to fund technology projects. Claire Cieremans, the district's chief financial officer, said the district has had the voter-authorized 3 mill levy in place for the 18 years she worked for the district.
The levy is put before the voters every five years, she said, and every time it passes the district she is grateful, Cieremans said. In the 2014-15 school year, the levy is expected to generate about $2.2 million for technology projects around the district.
"Without the public's support, we would have to try and do these technology projects out of our operational fund and that just wouldn't happen," Cieremans said. "With technology, as fast as it improves and grows, for us to take $2 million from elsewhere would be very detrimental for us."
Recent projects funded by the HB 33 levy include the rewiring and installation of a network at Valencia High School for a total cost of $410,285, and the scheduled replacement of about 300 computers district wide for $381,000.
Special districts, such as the Middle Rio Grande Conservancy District, are also authorized to impose taxes on property owners within its district. Each school district collects a portion of property taxes, as well as the University of New Mexico-Valencia Campus, the county and state.
And the place that keeps all those mills straight is the Valencia County Assessor's Office. Valencia County chief appraiser Orlando Montoya admits there's a lot that goes into calculating the property taxes.
But he emphasized that the assessor's office is always willing to review a property owner's assessment to make sure it's correct. One thing residents can do it double check the notice of value that's sent out every spring.
"Are any exemptions you qualify for applied? Did your value go up and you didn't change anything? Everyone can protest their valuation," Montoya said.
Every assessor's office is charged with re-assessing properties every two to three years, Montoya said. At that time, appraisers from the department visit residential and commercial properties to see if any improvements have been made that would increase the assessed value.
If improvements have been made, the assessed value will increase, said Montoya, a state certified appraiser IV.
"If there are no improvements, then the annual assessment only goes up by 3 percent," he said. "The cap also doesn't apply if there is a change in ownership or for the first year of new construction."
Montoya said it is very important for the financial health of the county and all the agencies that collect mill levies to have accurate assessments.
"If a property is undervalued, it's capped at the 3-percent increase and we really can't recoup that," he said. "If they don't do any improvements and we only get the 3 percent a year, we won't reach market value for a very long time."
Market value or what's called "current and correct value" is the goal of every assessors office around the state, Montoya said.
But getting to current and correct can be a waiting game that takes decades. Gurule's Los Lunas home is a prime example of the situation. Every year, his assessment is increased by 3 percent. It isn't until the property is sold that it can be assessed at market value.
"You can have a property sit at nearly the same value for what seems like forever," Montoya said. "But once it sells, it comes up to current and correct."
That change is what's known as "tax lighting."
Since the law capping assessments at 3 percent until the property is sold was enacted by the Legislature in 2001, property owners across the state have been critical, saying it was unfair to new owners.
The law was enacted to help longtime property owners where expensive homes were being built in older neighborhoods and surrounding property values skyrocketed. The cap prevented taxes from spiking on homes and land that had been owned by the same family for generations.
Property owners in Bernalillo County challenged the law, but in June, the New Mexico Supreme Court upheld the legislation.
Montoya said property owners are also upset when their assessments go up by the 3 percent while the market values drop.
"If the market value of your property drops, your assessment doesn't go down automatically," he said. "If you feel your property is over assessed, you can file a protest. We will reassess and the value may drop, but we don't drop values across large swaths of properties just because the real estate market shifted."
The chief appraiser also reminds property owners to double check that any exemptions they are qualified for are being applied. The exemptions are for head of household, veterans, disabled veterans and property owners who are 65 and older and low income.
"But if you're 65 and well off, you don't qualify for the assessment freeze," Montoya said.
While assessed values usually don't change except to go up, the mill rate — the amount of taxes imposed — may change depending on the actions of local agencies. For instance, last year the Valencia Soil and Water Conservation District asked voters to approve a new property tax for a quarter mill or 25 cents per $1,000 of assessed value.
That new tax took effect on July 1, so when property owners across Valencia County and in parts of Bernalillo, Cibola, Sandoval, Socorro and Torrance counties get their tax bills next spring that quarter mill will be on there.
Earlier this year, the MRGCD board of supervisors voted to up it's mill rate on property owners in the district. The increase means a homeowner with $100,000 of assessed value will pay $417 a year instead of $397, said Tom Thorpe, spokesman for the conservancy.
And some property taxes eventually cease to be collected. The most prominent one for Valencia County residents is the 2.75 mill levy for the yet-to-be-built county hospital. The tax was imposed in 2007 and will end in 2015 after bringing in nearly $20 million for operation and maintenance of an eventual hospital.
With a background in economic and rural development, current Valencia County Manager Jeff Condrey said he felt, all things being equal, property taxes weren't a major factor in people considering where to buy property.
"Everybody has property taxes. I think when you compare taxes to quality of life amenities such as quality of schools, public safety and other services, they are small in comparison to those other factors," Condrey said.
The county manager said in his opinion imposition of gross receipts taxes were "better" than property taxes because it spreads the burden around.
"Anyone who shops here whether they live here or it's someone just passing through on the interstate they will pay the GRT, it's not just on property owners," he said.
Condrey continued, saying given the county's current balance of property taxes and GRT, it was in a good place for growth and progress.
"Belen and Los Lunas are known for their affordable housing," he said. "We have a good balance, around the middle of the pack. There is a lot of potential here."
While the county's primary source of revenue for its general fund is property taxes, it only receives 27.8 of the millions collected. The rest is distributed to the local agencies that imposed the additional mills.
The county's growing population will continue to demand more and more services, and they have to be paid for somehow. The decision to add two new gross receipts taxes in Valencia County is evidence of that.
Condrey said people come to the county, attracted to the openness and rural aspects of the area but often with the expectations of urban living, such as streetlights and all paved roads.
According to population growth projections by the University of New Mexico, Valencia County's population could hit 88,380 by 2020 and more than 106,000 by 2040. For that 20 year period, the county is second only to Sandoval County in predicted growth rates.
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