Tax Lightning is Dead; Long Live Tax Lightning?

“Tax Lightning” is a situation in New Mexico dealing with property taxes in which someone who buys a new home experiences a dramatic increase in property tax burdens because the property they are purchasing is no longer covered under the state’s 3 percent annual assessment increase. This situation was overturned yesterday by a judge who said that such unequal treatment was illegal. Read Albuquerque Journal article here .

The judge’s decision is definitely a double-edged sword. On one hand, taxpayers who stay in their homes for longer periods of time definitely benefit from the 3% tax cap which has now been ruled to violate New Mexico’s Constitution. So, doing away with the cap could increase all of our property taxes. On the other hand, if the Legislature places a 3% cap on all property, this could be a very good thing for New Mexico taxpayers. On the other hand, New Mexico faces a $300 million budget shortfall. Are legislators really going to forgo another source of revenue at a time of constrained budgets? Only time will tell.

If you want to know more about the demise of “tax lightning,” tune in to the Rio Grande Foundation’s radio show “Speaking Freely” from 9am to 10am tomorrow (Saturday). We’ll be discussing the issues with New Mexico’s foremost legislative expert on “tax lightning,” Senator Mark Boitano.

Print Friendly, PDF & Email

38 Replies to “Tax Lightning is Dead; Long Live Tax Lightning?”

  1. What does this mean? Will I be able bring my property tax down? In 2008 I purchased a home. My property taxes were approx $1500 yr, the following yr now$3000. My house pmt went up 250.00 more a month. I hope & pray I can afford to stay in my home.

  2. Regarding “Tax Lightning” case where Judge Theresa Baca declared the state law unconstitutional

    According to the Greater Albuquerque Association of REALTORS®. 5,523 Class R1 (Existing Single-Family Detached) homes were sold in the greater Albuquerque area in 2008.

    Those 5,523 people have an interest is getting practical information.

    I have read articles in the Journal by Sean Olsen and freelance reporter Kevin Hoover, watched Senator Boitano on TV and listened to Senator Boitano on radio.

    Both Olsen & Hoover implied that all 5,523 buyers would have to file 5,523 individual court challenges. Senator Boitano, a great supporter of reform, spoke in general philosophical terms.

    The reporting I have seen, heard or read gives little, if any practical guidance. These 5,523 buyer have presumably had their valuations changed to market value in April 2009 and will be asked to pay property tax based on that new valuation in November.

    Is there anyone out there in journalism, talk radio land, politicians, county officials etc. that will give practical guidance on this matter, especially the following?

    1) Are 5,523 individual court challenges really necessary? Suppose lawyers charge $1,000.00 each to go to court, That’s a $5,523,000.00 windfall for lawyers. Sounds a bit ridiculous to me.

    2) Can the County Property tax officials take judicial notice and fix the problem for these 5,523 buyers proactively?

    3) Will the County Property tax officials take judicial notice and fix the problem for these 5,523 buyers proactively?

    4) After the taxes have been made by the owners either directly or by mortgage companies from escrow funds, can a claim for refund be made, shortly thereafter?

    5) What is the proceedure for filing form the refund?

    6) Will County officials force all 5,523 individuals to go to court or do the moral and correct thing and simply grant the refunds and be done with it?

  3. The subject matter of the decision by Judge Baca was my property, I was the appellant in that case. I filed a protest where I represented myself and argued to the Protests Board that “tax lightning” violated the New Mexico Constitution. After the Board agreed with me that “tax lightning” was unconstitutional but refused to refund my taxes because they did not believe they had the authority to do so, I appealed my case and was represented by Clinton Marrs, an Albuquerque lawyer. You can read about my experience and opinions at the blog I created when I first started my challenge.

    http://noproposition13innm.blogspot.com/

    I became a licensed attorney in New Mexico in April, so I would like to voice my opinion here with the following proviso, IT IS NOT LEGAL ADVICE. If you want legal advice please consult a lawyer! With that said, I will share my opinions with you.

    1) Are 5,523 individual court challenges really necessary? To get 2009 tax refunds–Yes. That is because New Mexico law requires EACH taxpayer to either file a protest (the deadline for that has already passed) or a complaint in District Court. That deadline for filing a complaint for recovery of a refund for 2009 taxes has not passed–you can read the timeline for filing a complaint on the back of your property tax bill.

    Each taxpayer will have to file for a refund. Anyone can file a complaint for a refund if they have been “hit” by “tax lightning,” not just those 5,523 buyers who got hit most recently.

    2 & 3) The property tax officials’ duty is to follow the law, and the law established in my case does not affect other taxpayers, it only binds the parties involved. Should the assessor choose to appeal my case and the taxpayer (me) be successful, this case has the potential to become the law of the land and binding on all property taxpayers. The resolution of any appeal could take some time, however. As soon as I find out if there will be an appeal I will post that information on my blog.

    If there is not an appeal, I will receive my refund (and a reduction in assessment to a 3% increase) but “tax lightning” will still be the law until either the legislature fixes it or nixes it, or a new challenge makes it up to the New Mexico Supreme Court for resolution.

    4) It is not too late to file a complaint for a refund for 2009 taxes. See my response to question 1.

    5) You have a choice of protesting your taxes or filing a complaint in district court. The deadlines are on the back of your tax bill. It is too late for a protest, but the deadline for filing a complaint has not passed.

    6) Because the decision in my case only affects me, there is no basis for refunding other taxpayers’ taxes without a protest or complaint for a refund.

    Good luck all.

    1. What about this? Seems clear that the decision would apply to everyone:

      NMSA, 1978, 7-1-27. Conclusiveness of court order on liability for payment of tax.

      7-1-27 NMSA: “Whenever the jurisdiction of the district court of Santa Fe county or the court of appeals is invoked according to the provisions of Section 7-1-25, 7-1-26 or 7-1-59 NMSA 1978, or whenever the jurisdiction of any federal court is invoked or whenever the jurisdiction of any district court of this state is invoked according to the provisions of Section 7-1-58 NMSA 1978, a final decision of that court or of any higher court which reviews the matter and from which decision no appeal or review is successfully taken is conclusive as regards the liability or nonliability of any person for payment of any tax.

    2. would like to hear back from attorney Stephanie
      Dzur regarding my assessment in Santa Fe.

      Thanks
      Marc

  4. Just a clarification of # 6 — I meant to say, “Because the decision in my case only affects the parties,” there is no basis for refunding other taxpayers’ taxes without a protest or complaint for a refund. Taxing officials may stand on the procedural requirements and not extend the benefit of this decision to other taxpayers because of the the procedural requirements in our laws for claiming a refund.

    1. I’m protesting my property tax bill and have a hearing scheduled in 10 days. We purchased in 2007 and are victims of tax lightening. Any advice would be appreciated regarding documentation I should bring with me. I don’t have legal representation for the hearing. If we don’t get a reduction to pre-2007 levels we’ll be forced to sell next spring. Thanks in advance for any input.

      1. Same as our situation – 2007 tax lightning strike. We had our hearing on Sept 18, still waiting for the response. We submitted the Dzur case as precedent into our record and we submitted value notices from other properties in our neighborhood to show the inequities. You can print them from the Bernalillo County website. We also studied the statutes and were prepared with counter arguments, siting tax code. We were prepared with the values of what our assessments should have been for 2008 and 2009 based on a 3% increase each year and we calculated our refund for the 2008 taxes we had already over paid.

        The hearing was very intimidating, there was an attorney for the assessor who did most of the talking. There was also an attorney for the Board but he did not say much because he was there to advise the Board, not the homeowner. If you haven’t already, read Stephanie’s blog http://noproposition13innm.blogspot.com/ and study the tax code before you go.

        One thing we have working against us is that we are behind one year (2007 instead of 2008) – that is something they will use against you. In other words, why did you wait a year to protest? In our case, when we received our assessment notice in April 2008, we didn’t realize the crazy increase (92%) because we didn’t have the previous homeowner’s assessment notice from the year before to compare it to. And of course, as you know, nobody tells you this is going to happen to you so we didn’t know to look out for it. So, in Nov. 2008 we realized what had happened when we received our tax bill. I called the assessor’s office and was told my only option was to go to court but it would be expensive and I would probably loose. So we waited until the next available protest period, April 2009, and here we are now.

        The other thing they will tell you is that the Dzur case has no precedent because it is not published. After our hearing I was told that the proper reply to that is “collateral estoppel”. Look it up and prepare your response accordingly.

        Good luck and please post here how your hearing goes.

  5. Your claim was an appeal from a denied change of your tax valuation. The law was declared unconstitutional. Now what I want to do is get a class together to sue collectively for everyone who bought a house from 2004-2009 for a refund of overpaid tax. If Clinton Marrs is going to do that I’m all over it. The property books could serve to notify anyone who recorded a trust deed in that period. What I don’t know is whether you can bring a class against againt the state or a state agency.

  6. I am a victim of the Lightning tax. I went before the Protest Board, but have not heard from yet. I did agree to waiver the sixty days if they used it to seriously consider the documentation I submitted. My quest is do I need a lawyer to file for a refund with the District Court?

    I am aware of the sixty day window, but I have not received my 2008 property tax bill yet. I will follow whatever instructions are provided to file with District Court for a refund. My question still stands, will I need a lawyer? tjm

  7. I purchased my home in 2006 and the property taxes doubled from 2006 to 2007. I protested and met with the assessor today. I have a hearing next week and do not have funds to hire an attorney. Any advice for preparing for the hearing would be greatly appreciated.

  8. My husband and I purchased my mom’s house in 2008. She developed Alzheimers and the payments; mortgage and interest help her to stay in an assitant living home. To add insult to the already sad situation, the property tax bill went up much more than the 3%. I have read your questions and answers, but I have not seen any information on how to proceed and file a complaint in court. Can I do it myself, what kind of paperwork do I have to take, is there anybody out there that can help with that? Maybe you have done the entire process and can give advice from where and how to start; something like a step-by-step guide. At this point, we don’t want to involve a lawyer due to the expensive charges. Any help is very much appreciated.
    Marion
    Junk1E@comcast.net

  9. Please help! I bought my house in summer of 2006 then refinanced in spring of 2008 since then my taxes have doubled and now I’m paying more than before I refinanced. I appreciate any help you guys could give. Where do I start? Where do I go? County Accessors Office? Hire a lawyer? Move out of state? Thanks for any reply.

  10. There were 3 homes in my neighborhood, including mine, which sold in 2006. Out of 16 properties, those 3, have the highest assessments, mine being the 2nd highest.
    My question is, for anyone that might know, why haven’t taxes risen for some properties sold on or after 2001? There were 3 properties sold in 2004 and 1 in 2005. The only one that had other than 3%, was sold in 2005.
    Does anyone out there have a clue?

  11. We just purchased a home and received our new tax bill. The amount has doubled from the previous owners liability. We expected this to happen with the knowledge that it has been ruled unconstitutional. Our hope is to join a class action suit rather than go it alone. There is more strength and finance together with all of us and one or two lawyers. Please e-mail me and lets work together.
    jonngore@yahoo.com
    Jonn Gore

  12. As reported in the Albuquerque Journal, Nov 7, the Bernalillo County Assessor will roll back the valuation for tax purposes for about 300 homeowners who contested the assessed value of their homes. Applies only to those who bought a home in 2008 and then filed a protest this year contesting the assessed value. An adjusted tax bill will result. For everyone else, go to court.

  13. I am just about to jump into this ring. Purchased my home in late 2008. Never received a tax assessment in spring of 2009. Now comes the current bill. Didn’t see this coming and no thanks to the RE agent. Looking for any advise with this process for a refund. To know which comps to gather, what is the most effective way? What are court costs in general ?

  14. Did anyone file a suit or a class action suit? If so, please include me! We purchased a home in the North Valley in Feb ’08 and my husband became gravely ill. He usually paid attention to our tax bill. Since he was so ill and I was working and busy being a caretaker (he later died in March of ’09), it was only recently that I realized what had happened to our property tax! Wow – a gut buster! Now, not only have I lost 1/2 my monthly income, but have a significantly higher tax liability! Where/how to proceed?

  15. I empathize with you folks. We live in Corrales (Sandoval County) and also experienced the effects of Tax Lightning after we purchased our house in 2006. From what I get from Sandoval County officials, nothing is happening to address these inequities in our county and it’s all up to individual property owners to protest or file a lawsuit. I’m sure others in Sandoval County are in the same boat as we and if so I’d like to encourage us to band together to get a class action suit started. If interested, contact me at genehouck@yahoo.com.

  16. Our attorney filed suit and now we are waiting. Always remember when required to sue to be treated fairly you can’t expect a fair response. I expect the people who are unfairly taxing everyone to dig deeper to protect the financial system of collecting revenue whether it’s right or not. It’s not a very good omen when those above you are abusing their authority and on top of stretching your financial ability to pay, they force you to pay an attorney to obtain what you thought you were voting for in the beginning….a just ruling by a fair minded person.

  17. Thank you for all this information I just discovered!
    I am a victim of the tax lightning. Last summer I filed the protest and agreed to settle even if not satisfied with the assessed value (still double than what the seller previously payed) because it would have been too intimidating to go at the hearing without a lawyer.
    Do you think I am still in time to join your class action suit hoping to get a refund or what do you suggest?
    Best wishes, Donata

  18. I Did file a protest this year after being hit by tax lightning. We purchased our home in 2005 and from 2005 to 2009 our property tax increase by about 50% . Upon doing research into public records I found out that my neighbor whose property is larger than mine is paying about 75% to 50% less than any other house in the neighborhood. I could not get any good reason from the assessors office as to why there is such a big discrepency I was told that they probably protested their taxes. Hopefully my protest produces the same results. I am more than willing to join any class action lawsuit that may be in the works. Thanks for keeping us informed.

  19. I am a victim of the tax lighting issue as well. I purchased my first home in April of 08 and saw the taxes increase almost 80% from the previous owner. It has become a huge mess with my bank having to guess what my tax bill is going to be because my escrow company didnt anticipate for the tax to increase as much as it did. Although it seems that they have corrected my value for 2010/11, I over paid about $600.00 for the 2008/09 year. I am now having to recover that 600.00 in increased monthly payments to my mortgage company. It might not seem like a lot, but being a young home owner with a tight budget every penny counts. Also I don’t think my $600.00 that I overpaid will be worth hiring an attorney for. If a class action suit is being formed please post some info, as I am very interested in tyring to get my 600.00 refunded. Thanks for any suggestions.

  20. This is still happening. We bought our home in 2008. Our loan payment in September, 2010 just increased by $400/month. On our property tax bill, the “new assessed value improvements” increased by over 100k from 2008 to 2009; and this doubled our property taxes. (Trust me, we have not made 100k in improvements.)
    I looked around the rest of the neighborhood…
    http://www.bernco.gov/property/default.asp?qpaction=search_form&type=situs
    …I pay double the amount of property taxes compared to anyone else on my block. And the houses are all similar in size, value, etc…
    I guess now is the time for the clueless to be affected in their pocketbook.
    Without a doubt, I am paying twice as much in property taxes for a similar valued house than any of my neighbors.
    I am looking around for solutions and it seems like the thing to do is protest individual cases.
    I noticed an increase in valuation in April, but was too stupid to realize that would translate into such a drastic increase in my monthly loan payment.

  21. Put an end to the aristocracy that bilks us for our hard earned money under the pretense of educating our children who as it turns out, cannot not even read at the 4th grade level after 12 years of schooling.

    This is a sickening society funded by white collar tax crimes against the people. Oh gee I forgot to mention that if you call a so called regulator/authority and try to get some kind of law enforcement what you get is double talk, bullshit and the burden of proof shuffle that takes you in a loop going now where.
    Lets try firing them all and starting over. Reduce the taxes back to 1980 levels and think about how we can improve education without all the crap about how we all of sudden do not have money to buy school books.

    1. It is probably too late for prior years but you can protest your property valuation next time you receive a Valuation Notice and have the valuation reset back to a 3% annual cap.

  22. Is it too LATE for me?
    We bought a house in Jun 2008. Our property tax is increased from $1700 to $3000 in 2009. It increased another 4.4% in 2010. It’s to a point that we are no longer able to pay the mortgage if it increases like this.
    I am still elgible to file a law suite after two years? Could you recommend a lawyer or anybody/group that can help us?
    Thanks in advance

    1. I too have this problem here it is Dec. and just learned my house payment is going up from $864 a month (which I refinanced to lower my payments in Aug.) to $1250 per month! My taxes used to be $400 a year now they are $2400 per year! Someone contact me on what to do, a lawyer? Can I get others to put our money together and have 1 lawyer represent all of us and maybe save money on legal fees? Contact me

  23. Just had my protest hearing for tax lightning problem in Las Cruces, 23 Aug 2010. I was denied last year stating they had no recourse but to follow the law. This year the same story even with Judge Arrieta’s finding it unconstitutional. Is there anyone in my area working on this problem?

  24. I can’t believe I just found this site – since 2008 I have been reeling since I was hit by the “lightning” tax on my home that I purchased in Albuquerque in 2006. My revised tax increased my property taxes to $3200 per year and increased my house payment by $350 a month. At the same time my pay was reduced by 10K per year due to budget cuts.

    I met with the assessors at the time who told me nothing could be done. I talked to friends, realtors, anyone I could think of – to no avail. I have even wrote to Larry Barker Investigates on Channel 7. After three years of this I fell behind in my payments and had to rack up credit card debt to survive and my perfect credit is shot. I finally had to sell my beautiful home in April of this year. After reading these stories I know I was not alone and that many others were feeling my pain. What is so ironic is for them to decide the lightning tax was illegal. It was like “never mind.” I am going to write to the assessors office, Governor Martinez and the Attorneys General’s office.

  25. I need information regarding the Assessors office changing the status of one of our homes which has an “inlaw quarters and it is also rented . Our tax doubled because the Assessors office now classifise the property as a dublex. We have been leasing both since 1999 when we purchased it. Is it legal to change our status and double our tax? Is there a class-action suit now in the courts addressing this same issue?

  26. YOUR PROPERTY TAXES WILL REMAIN THE SAME EITHER WAY. IF THEY REMOVE THE CAP YOUR VALUE WILL GO UP BUT THE TAX RATE WILL GO DOWN. IF THEY ROLL BACK VALUES THE TAX RATE WILL GO UP.

  27. The NM Court of Appeals published their decision up holding the statutes constitutional. Now watch what happens to your taxbills since “Ass”essor Karen Montoya jumped the gun and took it upon herself to make roll back all the residential values and ignore the statutes as set forth. First she stated that the law was unconstitutional when the district court issues their decision and then she appeals the cases, now that is someone that plays both sides of the fence well. And this is the same person that wants to run for PRC? I would wouldn’t be surprised to see her increase your values to what they were plus some prior to her rolling back the values. And this is the same person that wants to run for PRC?
    I would imagine that all the Assessors in NM would agree that the current statutes create great disperaty amoung taxpayers. The laws that have been proposed by Tim Eichenburg, Mark Boitano only put a band aid on the problem. The only true solution to the issue is to bring all properties up to current and correct, but not one of your legislatures have the guts to make that move. It would be political suicide. The only recourse we have as property owners is to ensure that the values set on our properties are correct. Make sure if you protest you valuation you use plenty of comparable properties of simular size, location and quality. Check to make sure that the assessor uses properties simular to yours and that they don’t use only the highest valued comps., In some cases it is better to get a licensed appraiser to value your property. It may cost you a few bucks but the benefit of reducing your tax bill over a period of time may be worth it. It matters not what your neighbor pays it only matters if your valuation is correct. Work with your county assessors don’t go in with the intent of creating world war iii, rather be respectfull and professional. Don’t forget the people that work in the assessors office are taxpayers too and are subject to the same laws as you. It is the Assessor that sets policy, if you have a beef with the office take it up with the assessor not the employees. As they say you will catch more flies with honey than with vinegar. Hope this helps some of you.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.