Ron and Ellen Shulman were perfectly happy in their Palo Alto home of nearly 20 years. But when a company controlled by Facebook founder Mark Zuckerberg said it would pay $14 million for the property, the offer was too good to pass up.

It was a classic Silicon Valley real estate dream come true. They had paid a fraction of that for the house.

So, the Shulmans packed up and headed for tony Atherton, eventually settling into a home assessed at just under $7 million. The couple planned to use a state law that allows residents over age 55 to transfer their property taxes, in this case from the Palo Alto home to the new house in Atherton, without increasing their tax payment.

Because they had purchased the Palo Alto house for little more than $1 million in 1995, what’s known as the base year value had risen to just $1.7 million, a huge figure in most real estate markets, but relatively modest on the Peninsula. They paid less than $20,000 a year in property taxes. The state law, Prop. 90, allows people who move from one of a few participating counties to another to keep their old property tax as long as their new home is of equal or lesser value than their old residence.

But based on an assessment of their Palo Alto home, the Shulmans’ request was denied. Their property taxes rose to around $80,000, more than most Americans make in a year.

Now, they’ve spent years embroiled in a bitter and costly multi-county tax dispute that has resulted in a lawsuit in Santa Clara County Superior Court over how much a property is really worth and who gets to decide.

“It’s very frustrating and troubling,” said Ron Shulman, a patent trial lawyer, adding that the couple had deliberately kept their new home within what they thought would be the confines of Prop. 90 to avoid incurring extra tax costs. “We seem to have done everything by the book the way it should be done.”

Their story began in 2013, when the Shulmans sold their home on Hamilton Avenue in Santa Clara County to RFBPO, a Zuckerberg-owned LLC. The Zuckerbergs bought up four properties, including the Shulman’s, around their Palo Alto home after learning that a developer planned to build a home next door that would be tall enough to see into the Facebook CEO’s master bedroom.

The Shulmans purchased property in Atherton in San Mateo County and built a new home on it by 2015, within the two-year time frame Prop. 90 requires. San Mateo County assessed the new property at about $6.8 million. But when the couple applied for Prop. 90 approval in San Mateo County, they were denied. That’s because Santa Clara County had assessed the value of their old residence at just $4.9 million, a fraction of the sales price. And that put their new place well above the required threshold allowed for a property tax transfer — 110 percent of the old home’s assessed value.

With the denial of the transfer, the Shulman’s say their property taxes rose by about $60,000.

Shocked at what they and their attorneys characterize as the “arbitrarily low assessment of the original residence’s value,” the Shulmans asked San Mateo County, where they now pay property taxes, to review the issue. But San Mateo County demurred, saying it couldn’t adjust a valuation from another county.

“We don’t really know why we’re part of this lawsuit,” said San Mateo Deputy County Counsel Rebecca Archer.

But according to David Ginsborg, deputy assessor for Santa Clara County, the $4.9 million assessment is fair.

“Just because there’s a transaction,” Ginsborg said, “a transaction doesn’t determine the market.”

When the Shulmans tried to go to Santa Clara County to review the assessment documents, they were denied access since they no longer owned the property. And when the pair asked RFBPO to give them access to the documents, the company declined. An attorney representing RFBPO declined to comment. But if the county were to reassess the property at a higher value, the Zuckerbergs could face higher taxes.

Feeling stuck, the couple filed an appeal in San Mateo County. The appeals board again said the county couldn’t do anything and pointed them toward Santa Clara County. But the Shulmans have argued that they can’t file an appeal there because the appeals process is for people who own or pay taxes on a property in the county. They no longer do either.

“This is truly living life between a rock and a hard place,” reads the Shulman’s suit against the two counties and the LLC.

The Shulmans say they’ve been denied due process and want the court to ask Santa Clara County to revalue the property. The $14 million sales price on their Palo Alto home, they said, is what the market supported.

“Everybody’s pointing a finger at everybody else,” Shulman said. “We feel like we’re in a bureaucratic nightmare.”

The assessor’s office, Ginsborg said, is required to look at everything from location and square footage to amenities and home quality and ask, essentially, “What would a normal buyer pay for this home?”

But the Shulmans and their legal team say the county didn’t fully take into account the roughly $3 million complete remodel of the Palo Alto house they did a few years before they sold it, or the fact that other homes in the neighborhood had also sold for more than $10 million. And, they said, an independent appraisal they requested said the property was worth about $6.7 million, within the 110 percent value of their new home allowed under Prop 90. So, they argued, even if the county declined to assess the property at $14 million, it should have been much more than $4.9 million.

If the county used the $14 million figure, the property would funnel well over $100,000 toward Santa Clara County.

“The Santa Clara County school system is going wanting for $100,000 every year and an elderly couple is being surcharged more than $50,000 every year as a result of the county’s arbitrary assessments,” said Paul Barulich, an attorney representing the Shulmans, who are both in their mid-60s.

Ginsborg, who said he is friends with the Shulman’s son, pushed back at that notion.

“The public wants us to adhere to an independent standard so that when it’s their turn, they know they’re getting a fair shake,” Ginsborg said.

Almost a decade ago, he noted, Israeli-Russian tycoon Yuri Milner broke records when he paid an eye-popping $100 million for a Los Altos Hills home. But the assessor’s office valued the home at just half that, $50 million, analyzing comparable properties as far away as Los Angeles to arrive at a value.

Patricia Cain, a tax law professor at Santa Clara University who is not involved in the case, said the county’s appraisal of the Shulman’s old property “seems outrageous to me…That just doesn’t happen in the real world.”

The parties in the suit are expected to meet later this fall to discuss the case.

Shulman, who plans to retire within the next couple of years, wants what has become a time-consuming headache resolved.

“Had I known,” he said, “we never would’ve done this.”