The Proposition 13 Value1 represents the maximum taxable value for your property.
Since the passage of Proposition 13 in 1978, property is assessed at its fair market value as of the date it is acquired. Your purchase price generally becomes the taxable “base value” as of that date. From that point forward the taxable value of your property is limited to no more than a 2% increase per year.2 For example, if you purchase a property which gets assessed at $500,000, the annual taxes would be based on $500,000 the first year, trended to $510,000 ($500,000 x 1.02) the second year, and trended to $520,200 ($510,000 x 1.02) the third year, etc. Also see example below.
In a declining real estate market, the market value of your property may actually be lower than your trended base value. In this case, your property may qualify for a decline-in-value reassessment, temporarily reducing the taxable value to its current market value. Once granted, a decline-in-value reassessment is reviewed annually and may be further reduced, partially restored, or fully restored to its trended base value.
To protect your right to appeal the value of your property you may file a formal appeal with the Assessment Appeals Board. For Supplemental, Adjusted Supplemental, or Adjusted Property Tax Bills, a formal appeal may be filed within 60 days of either (1) the mailing date printed on a Notice of Assessed Value Change, (2) the date of mailing printed on the tax bill, or (3) the postmark date for the tax bill, whichever is later. For the "Regular Assessment Roll," a formal appeal may be filed from July 2 though November 30 of the particular roll year.
Appeals must be filed with the Assessment Appeals Board, Room B-4, Kenneth Hahn Hall of Administration, 500 W. Temple Street, Los Angeles, CA 90012-2770. Visit the Assessment Appeals Board website for more information and to file your appeal online, or call 213.974.1471 to request an application by phone.
Click here to watch a video about the assessment appeals process.
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.
You must file a Decline-in-Value Review Application, form RP-87, with the Office of the Assessor between June 1 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.
In all other cases in which an interest in real property is transferred by reason of death, including a transfer through a medium of a trust, the change in ownership statement shall be filed with the county assessor by the trustee (if the property was held in trust) or the transferee within 150 days after the date of death.
If the above time requirements have expired, and the property has not been transferred to a third party, a claim can still be filed, however, the exclusion will only apply to future tax years. Click on Reassessment Exclusion for Real Property Transfers Between Parent and Child for more details.
No other transfers of property between family members are excluded from reassessment, including transfers between siblings.
In 2009, the State of California indefinitely suspended this program.
In the past, the Property Tax Postponement Program allowed some homeowners to postpone payment of property taxes on their principal place of residence. The program was administered by the State Controller's Office.
Further information can be found at the California Secretary of State’s website, http://www.sco.ca.gov/ardtax_prop_tax_postponement.html.
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