3 ON YOUR SIDE (3TV) - If you own property in Maricopa County, are you being overcharged for your taxes and not even know it?
Some viewers continue to tell us that the County reclassified their homes as a rental or "secondary" property, which means they pay more in taxes.
Kathryn Kerr has lived in her Chandler home for nearly 14 years.
But after making mortgage payments all this time, she and her husband got some troubling news.
Their mortgage was about to spike.
"We got a notice in the mail that our mortgage was going to be going up $150 a month because our property taxes went up," Kerr said.
Kerr says she wanted more details on her mortgage going up and discovered some disturbing numbers that raised eyebrows.
According to County records, Kerr and her husband were hit with a double whammy by the County.
They slammed them with a mysterious $428 civil penalty, and at the same time, they lost a $428 annual state credit for their house not being designated as their primary residence.
"It was about $850 that we had to pay extra because they somehow decided to reclassify our property from primary residence to a rental," said Kerr.
Owners of secondary homes, like rental property, pay the County more.
But remember, Kerr and her husband don't rent out their home. They live there and own no other property. It's not the first time taxpayers have had their homes reclassified and subjected to higher taxes.
In a recent 3 On Your Side report, Lawrence Ek says the exact same thing happened to him even though he's lived in his home for more than 20 years.
"I can't believe this is just an honest error. Something had to have happened," said Ek.
So, why are some homes being reclassified as a rental?
We contacted the Maricopa County Assessor's Office, but no one was able to talk to 3 On Your Side on camera.
However, they did give us an explanation. In Kerr's case, the agency claimed they received some kind of address change notification from the Post Office prompting them to change her home to a rental.
But, Kerr says she has no idea what the Assessor's Office is talking about and says if that was true all of her mail would have been forwarded, which never happened.
"It's not fair, it's incredibly frustrating and time-consuming, and I just want it resolved. And I want to know how and why it got changed in the first place after living here for 14 years," said Kerr.
Kerr says the whole reclassification ordeal is suspicious and she now actually must through the appeals process to fix the mistake.
Kerr wonders how many homeowners are accidentally letting it slip by because their taxes are being automatically paid from their escrow account, and they just don't notice the spike.
"I want other people to know that this can happen to them and you should be diligent if you receive any notices about higher taxes you should look and see exactly what it is," said Kerr.
If you want to find out if your home is classified correctly:
1. Go the Maricopa County Assessor's page.
2. Simply punch in your address and click on your property parcel number (APN number).
3. Scroll down and under “Description” make sure it says “PRIMARY”. If it says something else, you may be paying too much.
Maricopa County Assessor’s Office response:
I can confirm to you that we are looking to use all the legal remedies we can to provide them relief for the years they have not had the homeowner’s rebate. I’ll also reach out to the Kerr’s using the email that they provided on their appeal to relay similar information as we are continuing to work the appeals for this year that we received.
To be honest, I can’t confirm why we received a Notice of Change of Address. It could have been that the Kerr’s were filling out a form and the Post Office misinterpreted it. It could have been someone accidentally filled out a form when one wasn’t necessary. The change was about 10 years ago though, so I don’t know. But I do know that the Assessor’s Office takes this very seriously and is working to correct this within our legally available options and to provide relief for prior years that might have been overvalued and overpaid.
We unfortunately can’t get someone on camera, but we can say:
• Property owners should check their property details on our website, MCAssessor.Maricopa.Gov. Make sure the mailing address is where you would like to receive important notices.
• If your property is classified as Legal Class 4, but you both own and live in that home (while not claiming another homestead exemption like in another state), you can contact our office online or over the phone and we can work with you to get that fixed. You will need proof that you are a resident there such as a copy of a voter ID card or a driver’s license with that property address listed.
• Always read notices issued by Maricopa County. They contain important information and often are the result of actions we are legally mandated to do. If you are concerned about whether a notice was issued by Maricopa County Assessor’s Office, contact us again by phone or online.
Regarding the legal class verification program, the properties are not being randomly re-classified. We look at properties to see if:
• Multiple houses classified as primary residences have the same mailing address.
• Houses have mailing addresses separate from the property address.
• Houses have mailing addresses outside of the county.
• We also sometimes check when a property transfers from something like Ryan Boyd to Three Dogs Trust where it might not be obvious that the property is still being used as a home.
We then send letters to ask homeowners to confirm they are in fact the owner living in the property to ensure that they are properly classified.
We take protecting both individual homeowners and state tax money that is subsidizing primary residences very seriously. We’re willing to work with anyone who has concerns so we can get to the fair and correct answer to any issue.
The civil penalty is a legitimate part of the property tax system for people who did not respond to multiple letters from the Assessor's Office while the Assessor was trying to determine whether they live in the house to ensure that the homeowner's rebate only goes to qualified homeowners and not secondary and rental properties.
If the property owner lives in the home full time, they should file a notice of claim with a copy of a state issued ID as described on this page https://www.maricopa.gov/736/Property-Class-Appeal
so we can reclassify them.
What you're likely seeing is the Legal Class Verification program. This is a program where the County Assessor sends out several letters to properties that we have reason to believe may not be occupied by the homeowner. Authorized by A.R.S. 42-12052 with additional information found in A.R.S. 42-12053 and 42-12054, this program was created so that the homeowner rebate only goes to qualified properties.
In Arizona, the State Legislature and Governor routinely provides for "state aid to education" that reduces the property tax bill for schools for primary residence properties. Primary residence properties are classified as legal class 3 and are defined by being occupied by the homeowner or a qualified family member of the homeowner. A similarly situated house being rented to a stranger or that is a secondary home would be in legal class 4 which is the same as legal class 3 except that it does not benefit from state aid to education tax relief given by the State of Arizona.
Accordingly, the Assessor was instructed by the law and the legislative intent to ask properties that might not be occupied by the homeowner or their qualified family members for additional proof that they should be classified as legal class 3. This can often mean that a house has a mailing address that is out of state or that the listed owner owns multiple houses that are classified as legal class 3. We send out several letters asking for proof in the form of a copy of a state issued ID such as a voter registration card or driver's license or a utility bill with a service address and billing address of the property in order to verify that the homeowner or their qualified family resides in the property. If they send us this proof, no change is made.
If the resident does not send us any proof, we will change the legal class of the property to legal class 4. Further, in A.R.S. 42-12052, the County Treasurer will then assess a civil penalty equal to the state aid to education that homeowner received in the previous year which we assume was wrongfully given out.
It is important to note that as shown on the Clerk of the Board's website https://www.maricopa.gov/736/Property-Class-Appeal there are numerous options to appeal this classification and send us proof that the home is a primary residence. Under the "other options" you can see that after the legal class 4 has been changed, the homeowner can send us a notice of claim with that required proof of a state issued ID and we will happily change the legal class back. Our goal here is to make sure all property is correctly classified, so no one is paying more or less than they should according to the law. When someone is paying less in a property tax situation, other people are paying more for services that are provided to them.