As the region slogs through its fourth year of falling home prices, buyers have snatched homes for up to 70 percent below the previous price. But that doesn't mean their tax bills will be that low.

Property taxes are billed based on the assessed value of a home, which is usually -- but not always -- determined by the sales price of a home.

County officials in San Diego and Riverside counties said some foreclosures will probably be taxed at levels higher than the sales price.

Randall Smith is prepared to fight his assessment. His company, Smith and Butler Construction in Carlsbad, purchased a foreclosed house in Vista with fire damage for $100,000, in a neighborhood where homes typically sell for about $240,000. He said they will spend about $80,000 fixing up the property.

He hasn't received a property tax bill yet, but chances are it will be for well more than the $100,000 he paid for the house.

"I know I'm going to have to fight to get every cent possible reduced," Smith said.

There is plenty of reason for homeowners to pay similar attention to their assessments. California's Proposition 13 set the property tax rate at 1 percent, and capped annual increases in a home's taxable value at 2 percent, so the initial assessment determines how much owners pay for as long as they live in the house. But when a home sells, officials are free to adjust the taxable value to the "market value."

The law protects longtime owners with stable taxes, in contrast to most other states, where assessors periodically raise everybody's taxes if overall values increase.

Now that real estate prices have plunged, California homeowners can request to have their home values reassessed and property tax bills reduced.

Anyone who purchased after 2002 might save money on a reassessment, according to Standard & Poor's Case-Shiller Home Price Index.

But such reductions are temporary. Once the market recovers, the tax bill returns to the original assessment.

For the original assessment, county officials use a program that compares sales prices with the price of similar homes that sold recently. If the sales price is out of whack, the office might take a look at the property and tax it based on the comparable sales, also known as "comps," not based on the sales price.

"Who cares what the comps are? It should be valued at what it sold for," Smith said, adding that he doubts the county valued properties below their sales price during the huge appreciation through 2006.

"When you buy it at $200,000 and someone else bought it at $500,000 a year later, you know they would tax you at that new rate," he said. "It's a one-way door."

But Larry Ward, assessor for Riverside County, said officials would value properties at lower rates if the sales price fell outside the range of similar sales.

And Jeff Olson, division chief for assessment services for San Diego County, said officials have not changed their practices.

"Whether it's 2002 or 2009, we're doing the same process," he said.

Both Ward and Olson said the counties employ the comparable sales practice to weed out illegitimate sales, such as relatives trading ownership of a house and naming a price just to lower the tax bill.

They also said they do not keep records on how many properties are assessed at values other than the sales price, so they can't say whether this practice is more or less common now than years past.

Housing analysts across the region have reported that some homeowners will damage a foreclosure before leaving it to the banks, ripping out appliances and cabinets.

That, combined with a 40 percent average drop in prices since 2005, has contributed to hundreds of homes across the region selling for less than $100,000 over the last three months -- well below recent average prices, according to Redfin, a real estate listing Web site.

If those homes are only selling for a huge discount because work is needed, it is possible the property tax will be assessed on a higher value.

"The assessment should always equal market value," Olson said.

To do that, the county's assessor office makes sure the prices are similar to comparable sales, meaning the county's assessed value might not be the same as the sales price.

The practice raises the question of how to determine value that goes beyond academic discussions and affects homeowners' tax bills.

"You can talk about different values, but the bottom line is the value is what it sells for," said Kelly Cunningham, an economist with the San Diego Institute, a pro-free-market think tank.

Cunningham said there could be some discrepancies from that model, including severe damage to the structure or additional construction.

If homeowners disagree with the assessed value of their homes, they can submit requests for a reassessment free of charge.

In San Diego County, more information can be found at arcc.co.san-diego.ca.us. For Riverside County homeowners, more information can be found at riverside.asrclkrec.com.

Contact staff writer Zach Fox at (760) 740-5412 or zfox@nctimes.com. Read his blog, "On the Realside," at bizblogs.nctimes.com.