Buying Home In Los Alamos Can Mean Nasty Tax Surprise

From left, Chief Deputy Assessor Marty Martinez, Los Alamos County Assessor Ken Milder and Chief Appraiser Lucas Fresquez in their office Wednesday at the County Municipal Building. Photo by Bonnie J. Gordon/ladailypost.com

By BONNIE J. GORDON
Los Alamos Daily Post
bjgordon@ladailypost.com

It’s no secret that Los Alamos real estate prices have risen dramatically. The median listing price in Los Alamo was $495.3K in June 2022. It’s still trending up and has increased 12.7 percent over the past year, according to the National Association of Real Estate Professionals.

Homeowners may be fearful about their 2022 property tax bill. Most people won’t see that much change from last year, according to Los Alamos County Assessor Ken Milder. But some people may see a big jump. What gives? Milder, Chief Deputy Assessor Marty Martinez and Chief Appraiser Lucas Fresquez spent a recent morning explaining what they do and how they do it, to the Los Alamos Daily Post.

“If it’s taxable, we value it,” Milder said. “If it’s not taxable, we still value it. From homes to commercial buildings and even livestock, property has to be valued every year.”

“We assess property every year and make a site visit once every five years,” Martinez said. “We input a lot of data into our model and perform a statistical analysis to determine property fair assessments. We look at similar properties. We also compare the model values to the sale price if the property has been sold.”

Tax law complicates tax assessment, Milder explained. When property changes hands, the buyer gets hit by “tax lightning.”

The state legislature passed a law limiting yearly residential assessment increases to 3 percent, to keep New Mexicans from being taxed out of their family homes. However, when property is sold, the assessment is set to market value Jan. 1 of the following year, Milder said.

Since property taxes are based on the previous year’s assessment, the former owner’s capped amount will be collected, but the assessment jumps to the market value the following year. Tax rates can jump dramatically. Remodeling also can increase property taxes, though only on the portion being remodeled.

“In 2008-2009, housing values in the County declined,” Milder said. “Around 2015, the market started to turn around. The housing market has been hot nationally, but Los Alamos is unique in a number of ways. Hiring by Los Alamos National Laboratory has added around 1,000 jobs a year for the past few years. The other issue is we’re just running out of space on the Hill.”

“Our office has no incentive to overvalue property, we don’t impose or collect taxes,” Milder said. “If people have questions, we invite them to come in and talk with us during the 30-day period when owners can question the April tax assessments. We don’t see it as an adversarial process. We want to be fair to property owners and all the other taxpayers in the County. School bonds can add to the tax bill, but most revenue in Los Alamos comes from gross receipts tax, not property taxes as it does in most other counties.”

Fresquez added, “Sometimes people confuse the tax assessors with licensed appraisers. Appraisers use the same techniques we do, but they are appraising a single property, usually for a bank that is considering granting a mortgage.”

Sellers also get appraisals to find out the market value of their property. Of course, how much something is worth depends on what the market will pay. In Los Alamos right now, that can put buyers in competition with each other.

In 2018 Real Estate Broker Kristy Ortega joined the RE/MAX First Team. The current market presents challenges as well as opportunities for realtors, she said.

“Finding property to sell is the biggest challenge,” Ortega said. “This is a small town and it’s important to real estate professionals that we have a good reputation. We can represent both a buyer and a seller, because we are honestly trying to work out a deal that will satisfy both parties.”

Although there is some new housing going up, demand for Los Alamos homes is expected to remain high for the next few years, Ortega said. This situation will continue to fuel the town’s hot housing market. An increase in interest rates has done little to cool the local market so far, she said.