For some homeowners, there may be a silver lining in falling real estate values: lower property taxes.

For the first time in decades, the San Diego County assessor's office is seeing a widespread decline in market values of houses and commercial real estate on the tax rolls.

For many--but not all--property owners, the decline in real estate values can translate into smaller property value assessments and, therefore, smaller tax bills.

Chances are, however, that only owners who have purchased real estate since 1989 are due a tax break, San Diego County Assessor Gregory Smith said. That's because Proposition 13 has limited assessment increases to 2% per year since 1978, meaning that tax assessments of homes purchased in prior years generally lag far behind the increase in market values.

"Only when the market value of their home falls below assessed value do taxpayers need to be concerned," Smith said. "And most homes purchased before 1989 still have a low assessed value."

Property owners should not expect the government to know where market values have declined and to make the adjustments automatically, Smith said. In fact, his office typically reviews property tax assessments only after owners bring cases to his attention with appraisals or sales data of comparable homes in the taxpayer's neighborhood.

Generally speaking, houses in San Diego County have lost between 5% and 10% of their market value over the past year, Smith said. Some expensive homes and those in certain new subdivisions have lost even more value.

And hotels, apartments and commercial properties--retail and office buildings--have lost more value than residential properties. Those types of property also are eligible for tax cuts if values have skidded.

For example, a home acquired for $400,000 in 1990 may only be worth $360,000 today. Since property taxes are figured roughly at 1% of assessed value, the 1990 taxes due of $4,000 may have shrunk to $3,600 this year.

With the widespread decline in values in mind, the county sent out notices in July to more than 100,000 property owners who had purchased property since 1989, reminding them of what the assessed values are on the county's tax rolls. The mailings, Smith said, were reminders to owners to compare the assessments with current market values and file an appeal if called for.

There are about 800,000 taxable real estate properties in the county, Smith said.