California’s Proposition 13 established the base year value for property tax assessment. It also caps the growth of a property’s assessed value at no more than two percent a year unless the market value of a property falls below the base year value.
In 1978, California voters passed Proposition 8, a constitutional amendment that allows a temporary reduction in assessed value when a property suffers a “decline-in-value.” A decline-in-value occurs when the current market value of your property is less than the current assessed value as of January 1.
Over the past several years, the Office of the Assessor has proactively reviewed hundreds of thousands of properties that may have declined in value due to the housing market downturn and the recession. In 2013, the Office the Assessor processed 365,000 Decline-in-Value reductions.
However, now that property values are rising, property owners that experienced a reduction in property taxes could see their property tax bill go up by more than two percent. Taxpayers are encouraged to review this website for more information about Decline-in-Value and how property value is assessed.

  1. You must demonstrate that on January 1, the market value of your property was less than its current assessed value.
  2. You must file a Decline-in-Value Review Application, form RP-87, with the Assessor between July 2 and November 30 for the fiscal year beginning on July 1. Applications are valid if postmarked by November 30. If November 30 falls on a Saturday, Sunday, or a legal holiday, an application is valid if either filed or postmarked by the next business day.
  1. On your claim form, provide the Assessor with information that supports your opinion that the market value for your property is less than the assessed value. The best supporting documentation is information on sales of comparable properties. You should select two comparable sales that sold as close to January 1 as possible, but no later than March 31. You may query the Assessor’s database for sales in your neighborhood by clicking here. While the submission of comparable sales is helpful for the Assessor in determining the market value of your property, applications submitted without comparable sales will be accepted and processed.
  2. An appraiser will review your claim form and the information you provide. Other sales information available to the Assessor may also be considered. If the market value as of January 1 is less than the trended base value2, your assessed value will be lowered to the market value for the fiscal year beginning on July 1. The adjusted value will be reflected on your annual tax bill.
    If the current market value is higher than the trended base value, no change in assessed value will be made.
  3. If you disagree with the Assessor’s findings, you may file an appeal with the Assessment Appeals Board. You must file your appeal between July 2 and November 30 for your annual tax bill. If November 30 falls on a Saturday, Sunday, or a legal holiday, an application is valid if either filed or postmarked by the next business day.
    Example
    A property was purchased for $500,000. During a three-year period, the real estate market declined and recovered. The property owner filed for a decline-in-value reassessment. The following table shows the trended base value of the property, the market value of the property, and the assessed value of the property. Assuming a 2% Annual C.P.I.:

 

Year Base Value Trended Market Value Assessed Value
Year 1 $500,000 $500,000 $500,000
Year 2 $510,000 $480,000 $480,000
Year 3 $520,200 $510,000 $510,000
Year 4 $530,604 $550,000 $530,604

Frequently Asked Questions

Proposition 13 caps the growth of a property's assessed value at no more than two percent a year. How can the assessed value of my property increase by more than two percent?

Proposition 13 caps the growth of a property’s assessed value at no more than two percent a year. How can the assessed value of my property increase by more than two percent?

Under Proposition 13, base year values may not be increased more than two percent a year unless there is a change in ownership or new construction.

However, if a property declined in value and was assessed under Proposition 8, if the value of a property rises, the taxable value can increase by more than two percent a year up to the annually adjusted base year value. When a property is assessed under Proposition 8, the Office of the Assessor is required to assess the property value every year.

How do I get a Decline-In-Value assessment?

You must file a Decline-in-Value Review Application, form RP-87, with the Office of the Assessor between July 2 and November 30. Applications are valid if postmarked by November 30. If November 30 falls on a Saturday, Sunday, or a legal holiday, an application is valid if either filed or postmarked by the next business day.

On your claim form, provide the Assessor with information that supports your opinion that the market value for your property is less than the assessed value. The best supporting documentation is information on sales of comparable properties.

Do properties other than single family residences qualify?

Yes. All real property qualifies.

What is a comparable sale?

A property sold with features that are similar to your property is a comparable sale. Comparable sales information helps you analyze the value of your home. For example, a property similar in location, zoning, size, number of bedrooms and bathrooms, age, quality and condition to yours that sold in the open market is a comparable sale.

Where can I find comparable sales information?

A good place to start is online. The Assessor’s website offers sales information for properties that have sold within the last two years. The same information is available from any Assessor District Office. Also, many websites offer sales information free of charge. A local real estate agent or title agent can also be a valuable source of information.

If my assessed value is reduced, how long will it last?

Decline-in-value reassessments are not permanent, but last at least one year. The assessed value may decrease or increase depending on the market value of your property on January 1 of each subsequent year. Your assessed value will never increase more than the trended base value. It is important to remember, however, that base year values suspended by decline-in-value reassessment values continue to increase by an annual inflation factor of no more than two percent per year.