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Decline-in-Value – What is it?

Printable Brochure (Click here)
 
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 1.1

Eligibility Requirements

  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.
The Process

  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.

  3. If the current market value is higher than the trended base value, no change in assessed value will be made.

    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. Assumimg a 2% Annual C.P.I.:

  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

  Click here for the frequently asked questions about Decline-in-Value assessments



How Do I File for a Decline-in-Value?

A claim form is available from several sources. Choose what is most convenient for you.

Online: Forms are available at the Assessor’s website: assessor.lacounty.gov

Email: Send us an email at helpdesk@assessor.lacounty.gov

Phone: Call (213)974-3211

Claim forms may also be requested by mail or in person at any of our offices listed in this brochure.

What Form Do I Need?

Decline-in-Value Review Application (RP-87)
Available only from July 2 – November 30



1To read the law associated with Proposition 8, see Revenue and Taxation Code, Section 51. It is available online at www.leginfo.ca.gov.


2Property is assessed at the time of sale or transfer (base value) or new construction. That base value increases a maximum of 2% (trend) each year (i.e. trended base value).
 
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