Larry Ellison of Oracle gets a $3m tax cut on his estate

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Larry Ellison, ranked 12th on the Forbes 500 list with a net worth of $25 billion, has bagged a $3 million tax break after arguing that his flamboyant Japanese-style estate in Woodside is functionally obsolete.

The chief executive officer of software giant Oracle Corp. will be paid from San Mateo County property taxes collected this year, which otherwise would have gone to schools, the county general fund and cities, among other things, Deputy Controller Kanchan Charan said. The hit to schools alone will be nearly $1.4 million.

Ellison's Octopus Holdings LP acquired the 23-acre site in May 1995 for $12 million and spent nine years constructing the lavish property, modeled on a Japanese emperor's 16th century country residence, according to the San Mateo assessment appeals board.

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But Ellison's appeal claimed the property suffered from "significant functional obsolescence" because there is a finite market for high-end luxury homes, limited appeal for 16th-century Japanese architecture and the "over improvements" and "excessive" landscaping are costly to maintain.

The board ultimately agreed, slicing the valuation by around $100 million for each of the last three years, for a tax savings of more than $3 million, Flinn said.

The largest proportion of San Mateo County property taxes, 45.1 percent, goes to school districts, followed by 21.5 percent for the county general fund, 16.7 percent to cities and 7.5 percent to redevelopment agencies. Woodside will lose about $78,000 from the $130,000 in property taxes it collected on the Mountain Home Road property during the past few years, Town Manager Susan George said. Nevertheless, she doesn't begrudge Ellison.

"He went through a process that was laid out by the law," she said. "It shouldn't make any difference how much money he has if the process was fair."