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Updated: Monday, 15 Apr 2013, 11:19 AM MDT
Published : Friday, 09 Nov 2012, 7:13 AM MST
ALBUQUERQUE (KRQE) - The 3-acre Tuscan estate nestled in Albuquerque’s North Valley is the most expensive piece of residential real estate in Bernalillo County.
The 12,000 square-foot mansion features six bedrooms and seven bathrooms, while the grounds include a duck pond, a guest house, an orchard, a vineyard, a pool and cabana and enough garage space to accommodate a fleet of Rolls Royces. Its market value is said to be $7 million.
But something is wrong with this picture.
A Larry Barker investigation found that county taxpayers are being shortchanged by tens of thousands of dollars a year because property taxes on the estate have been improperly – and illegally – calculated for years.
Those property taxes – which should run about $80,000 a year on a property valued at $7 million – totaled $24.88 this year. In 2011, the owner paid $24.84, and, in 2010, the total was $24.76.
“This is incredible,” said Demesia Padilla, secretary of New Mexico’s Taxation and Revenue Department. “How somebody is only paying 24-bucks is unbelievable. I’d say that’s impossible.”
“This was an oversight, absolutely,” Montoya told News 13. “… I will accept the blame. I’m the county assessor and I will do what I can to rectify the situation.”
However, documents from the assessor’s office suggest that it might be more than an oversight. News 13 discovered an aerial photo of the property in the assessor’s file dated three years ago that clearly shows a massive estate was in the process of being built. Yet, still today, the property is considered agricultural with a taxable value of $603.
“(The assessor’s office) is being incompetent,” Secretary Padilla said. “They’re not doing their job.”
In order to understand the property’s journey through the tax rolls – or lack thereof – it’s necessary to go back 14 years. Back then, the North Valley real estate was an Arabian horse farm with a pasture and a barn. Because the land-use at the time was classified as “agricultural,” the owner paid minimal property taxes.
But in 2004, an Albuquerque developer bought the property, bulldozed the field and removed the barn. He then began construction on his dream house. However, that dream ended in 2009 when the contractor ran into financial problems and sold the partially-completed estate to a Texas tycoon named Michael Budagher for $1.7 million, according to records.
Budagher is a successful businessman and real estate investor who grew up in Albuquerque and now lives in Dallas. He also owns an 8,000 square-foot, $3.5 million French Renaissance chateau in Tanoan, and a $1 million mansion in Dallas.
The North Valley construction project took six years to complete and wasn’t officially finalized until just 10 months ago.
Still, despite the three-year-old photo and a note in the assessor file indicating that the “agricultural” classification should be removed, nothing changed, according to records.
“That’s a mistake,” said Montoya, the assessor.
Legally, though, Montoya may be off the hook.
“It is the property owner’s responsibility to let the assessor know that they are no longer using (it) for agricultural purposes,” Padilla said.
Montoya said property owners never contacted her office about improvements made to the property. And even if they had, she said her office does not put improvements under construction on the tax rolls until building inspectors complete their final inspection.
Because the estate took six years to finish, it won’t be assessed at full value until 2013, Montoya said. In 2010, the estate was 70 percent complete, according to assessor records.
“Once the home received a certificate of occupancy, the following year it’s placed on the tax rolls,” Montoya said. “We don’t put partial completions of properties on the tax rolls.”
But Padilla said that isn’t the proper procedure according to the law.
“They’re supposed to include the improvements if they are over $10,000,” the secretary said. “I think (Montoya) needs to go back and read the statutes. ”
By failing to put any of the improvements made to the property over the years on the tax rolls, Montoya cost taxpayers – and saved Budagher – tens of thousands of dollars a year.
In a telephone interview, Budagher told News 13 he plays by the rules and has done nothing wrong.
And Budagher may never be on the hook for the actual property tax bill, once that is worked out.
He has put the North Valley estate on the market for $7 million . In the real estate listing, broker Missy Ashcraft listed the current, nearly non-existent property taxes as a selling point, when state law requires brokers to disclose estimated property taxes on the sale price.
“Probably the most basic broker duty is honesty and reasonable care,” said Wayne Ciddio, executive secretary of the New Mexico Real Estate Commission . “And I would think that applies
to all aspects of the transaction to verify the information that they are giving a prospective customer and client.”
In January, county appraisers will calculate the property’s 2013 tax bill. Last week, New Mexico’s Property Tax Division sent Karen Montoya a letter directing her office to investigate the improper tax assessment on the $7,000,000 estate and “collect all unpaid taxes on the property attributable to the omission from property tax schedules.”
“Well, I guess we are just going to have to sit down and talk to Mr. Budagher,” she said.
On Tuesday, Karen Montoya was elected to a seat on the Public Regulation Commission.
New Mexico Taxation and Revenue Department’s letter directing the Bernalillo County Assessor’s office to investigate the assessment of the property and make changes to their tax roll as appropriate, collect back taxes on the property, and reexamine the practices within their office. Read Full Letter