I recently got my home’s tax appraisal reduced, so did Larry Ellison. I argued that my appraisal was higher than the price we paid for the house and was then increased, although average county house prices had declined 12.5%. Larry made somewhat different arguments.
John Murrell explain:
You donâ€™t get to be one of the richest men in the world by being a pushover, so it was no surprise to see Oracle CEO Larry Ellison bring his boardroom combativeness to bear when he felt the property tax assessment was too high on his 23-acre Japanese-style compound in Woodside. Ellisonâ€™s aptly named Octopus Holdings bought the property in 1995 for $12 million, and over the next nine years Ellison built it up in the style of a Japanese emperorâ€™s 16th century country residence. The estate consists of a nearly 8,000-square-foot main house, a guest house, three cottages and a gym. The landscaping includes a 5-acre man-made lake, two waterfalls, two bridges and hundreds of cherry and maple trees, redwoods, pines and oaks. Itâ€™s the kind of place where a Zen monk would feel comfortable, assuming he won the Powerball.
Including the cost of delays, overruns and change orders, Ellison put about $200 million into the compound. Based on the reproduction cost â€” without those added expenses â€” the San Mateo County assessorâ€™s office listed the value at $166.3 million in January 2005, and thatâ€™s where itâ€™s stayed. Octopus Holdings, however, had the estate on the books at $64.7 million, and took its case to the appeals board, claiming the propertyâ€™s unique nature would put it at a disadvantage on the open market. The appeals panel agreed â€” given the limited market for luxury homes, particularly in the 16th century Japanese style, the â€œoverimprovements,â€ and the expense of keeping up the â€œexcessiveâ€ landscaping, the board said the property is suffering from â€œsignificant functional obsolescence.â€ The board knocked $100 million off the valuation for the last three years and will pay Ellison a refund of about $3 million.
Unfortunately, Ellisonâ€™s gain is the rest of the communityâ€™s loss. Almost half of the refund comes out of Portola Valley School District funds, and the propertyâ€™s lower valuation means the district will be short $250,000 to $300,000 in annual revenue starting next fiscal year. â€œItâ€™s a significant chunk,â€ said Assistant Superintendent Tim Hanretty. â€œItâ€™s a permanent, ongoing reduction.â€ Other losers are the county general fund and assorted cities and redevelopment agencies.
Hat tip to Karen Myers.
Larry Ellison Gets His Tax Assessment Reduced
[…] Elijahfell wrote an interesting post today onHere’s a quick excerptThe landscaping includes a 5-acre man-made lake, two waterfalls, two bridges and hundreds of cherry and maple trees, redwoods, pines and oaks. […]
Bill Gates went through exactly the same thing with King County regarding his home on Lake Washington. The law says that homes should be taxed at “market value” — i.e. the price someone would be willling to pay, not the cost of construction. He also could have won his case, but the Yahoos (pun intended) in Seattle created so much fuss that he decided to drop it and pay the tax.
Afterall it is the moral obligation of people like Gates and Ellison to fund activities in excess of what the rest of the taxpayers are willing to pay.
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