No one is quite sure if the city of Española’s Santa Fe County residents and businesses would see their property taxes rise or fall if Española Mayor Joseph Maestas’ proposal to have Rio Arriba County annex the entire city is successful.
Maestas said he is currently looking into the legal ramifications of an annexation by meeting with attorneys involved in the annexation of the city of Corrales. Sandoval County eventually annexed the part of Corrales that was in Bernalillo County. According to Sandoval County Deputy Assessor John Murphy, there was no change in property values after the annexation.
While the actual residential property tax rate for Santa Fe County is around $1 less than that of Rio Arriba County (see sidebar), Santa Fe County homeowners generally pay higher property taxes because their property is assessed at a higher rate, according to Sean Cantrell, owner of ABC Mortgages and Real Estate and Appraisals by Cantrell in Española.
“Obviously the city of Santa Fe is playing a part in the value of the rural parts of the County,” Maestas said. “The valuation should be based on Española proper.”
Property values would not see an automatic drop, he said, but the rate at which they increase would go down.
Maestas said as a property owner in the proposed annexed area, his assessed property value increases by 3 percent every year. That is the maximum rate at which a county can raise assessed valuation according to state law.
“I’ve been told that properties (Santa Fe) County wide are undervalued, especially in rural areas,” which is the reason for the increase, he said.
Maestas said if the annexation were approved, property owners would see a change in the rate at which valuations increase, which translates to a slower rate of increase in property taxes.
Whether or not that is the case is not dependant on county assessors, but by the rise and fall of the market, Rio Arriba County Chief Deputy Assessor Ron Smith said.
Santa Fe County Deputy Assessor Victor Baca said all counties in the state are required to use the same method for determining property value. Generally assessors look at what property in the same or similar geographic areas in the county are selling for to determine values, Baca said. He said one reason the property values in Santa Fe County are higher may be because they are updated annually as opposed to every two years in Rio Arriba County.
The state requires all counties assess property values at least every two years.
Smith said Rio Arriba follows those guidelines alternating between the northern and southern parts of the county yearly. The last assessment of the Española portion Rio Arriba county took place in 2007, which means the next scheduled assessment would take place in 2009, he said.
Right now, sales indicate Española is booming, Smith said. Sale prices have increased about 6 percent in the past five years, he said.
If the annexation were to occur, Rio Arriba County would most likely use the current Santa Fe County assessments and do their own reassessment of the properties at the time of the next scheduled review, Smith said.
“Technically there’s no difference in the value of property once you step over the county line,” Cantrell said.
But an annexation could affect home sales, he said.
“There are certainly marketability issues that come into play,” Cantrell said.
There are some amenities to being a part of Santa Fe County, Cantrell said, such as access to higher governmental loans. Governmental loan limits are based on counties, and Santa Fe County has higher loan limits.
This means someone buying a house in Santa Fe is eligible for more money than someone buying a house in Rio Arriba County, Cantrell said. That can make a difference for those looking to buy.
“Right now government loans are ruling the roost,” he said.