Proposition 8 – Decline in Value FAQ
Thank you for visiting our site to do some research on Proposition 8. Below you will find frequently asked questions about what Prop 8 and what it can do for you, with regard to property taxes, if your property declines in value.
We are Tax Appeal Consultants, passionate about Property Tax Issues, Questions, and anything relating to Property Tax Appeals or Reductions. Doing research on Proposition 8 shows you are most likely also concerned about your property taxes. Is your Commercial or Residential property located in Southern California? If so we would like the chance to work with you.
Do you know if your Property Taxes are too high for your property, or if the value of your property has gone down? Have property values in your neighborhood been dropping? Anything happening in your area which negatively effects your property value could qualify you for a property tax reduction and possible refund.
We’re experts in the property tax field. Let us help you. Put our 25+ years of Property Tax Experience, Knowledge, and Excellent Service to work reducing your Property Taxes. We have thousands of happy customers who’ve taken advantage of our easy “no stress” service. We offer a free evaluation and we are paid through contingency fees. So if we don’t win you don’t pay.
Proposition 8 – Decline in Value FAQ
1) Filing a Decline in Value Reassessment Application (Prop 8 Review) will allow the assessor’s office to conduct a review of your property value.
2) Filing an Application for Changed Assessment (Formal Assessment Appeal Application) is the formal process to dispute your value. Appeal applications are to be submitted to the Clerk of the Board. The annual filing period is very short, July 2 through September 15 or November 30, depending on county.
If you miss the filing deadline, you will miss out on the opportunity for a reduction!
Real property may decline in market value from one lien date to the next lien date; however, it will not benefit from a lower assessment unless its market value falls below the current factored base year value. For example, if you purchase your property during a time when the real estate market falls dramatically, or if your property is substantially damaged due to a storm or fire that causes a reduction in your property’s value, it is likely that your property will benefit from a Proposition 8 reassessment. The decline in value is typically temporary and may be the result of changes in the real estate market, the neighborhood, or the property itself.
When the market value of a property on the January 1 lien date falls below the factored base year value (assessed value), the assessor is obligated to review the property and enroll the lesser of the factored base year value or market value. The factored base year value of real property is the market value as established in 1975 or as established when the property last changed ownership or when the property was newly constructed.
A property that has been reassessed under Proposition 8 is then reviewed annually to determine its lien date value. The assessed value of a property with a Proposition 8 value in place may increase each lien date (January 1) by more than the standard two percent maximum allowed for properties assessed under Proposition 13; however, unless there is a change in ownership or new construction, a property’s assessed value can never increase above its factored Proposition 13 base year value after adjusting for the annual increase.
This review process is performed by the county assessor and is in addition to the formal appeal process with the county assessment appeals board that is available to taxpayers.
Some assessors have indicated on their websites that they are reviewing certain property types purchased between specific time periods (i.e. all single family homes and condominiums purchased during 2004 to 2008). You should first peruse your county assessor’s website for their specific procedures and filing requirements for Proposition 8 reviews. Contact information and website links for each county is available via the following link: www.boe.ca.gov/proptaxes/assessors.htm.
The assessed value of my property increased more than two percent this year. There was no change in ownership or new construction. Doesn’t Proposition 13 limit annual increases in value to two percent?
When real estate values increase due to market conditions, the assessor must assess properties to either their original base year values, adjusted for inflation up to two percent, or to their current market values, whichever is lower. This may result in increases to Proposition 8 values in excess of two percent from one lien date to the next. For example, in a situation where a property’s value increased 10 percent since the prior lien date, but the value is still below the Proposition 13 adjusted base year value, the new increased Proposition 8 value will be enrolled.
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. However, not all of these factors must be the same as your property to be a comparable sale – “similar” does not mean “identical.” An “open” market means the transaction must have been offered for sale under typical market conditions; thus, a sale to a relative or a sale under distress may or may not have been sold under open market conditions. If using such sales, further investigation is required to determine if any unusual or favorable conditions were involved.
The assessor’s website may offer sales information for properties that have sold within the last two years. The same information is available from any assessor district office. Many websites offer sales information free of charge. Additionally, a local real estate agent or title agent can also be a valuable source of information.
I think the assessed value of my home has been higher than market value for the past two years. Can I apply for Proposition 8 review for both last year and this year?
Please note that your factored base year value continues to increase by an annual inflation factor of no more than two percent each year even during the time your property is assessed under Proposition 8.
What can I do if I don't agree with the value the assessor has concluded after having filed my Proposition 8 application?
I didn't look at my tax bill until it was due in November, and I paid it, but I'm pretty sure the assessed value is higher than the current market value. Is it too late to do anything about it now?
I filed my Proposition 8 application by December 31. When and how will I know if my property’s value will be reduced?
I filed a Proposition 8 application in May to request that the value enrolled on my property as of January 1 be reviewed. Can I postpone paying the first installment of my taxes due in November if the assessor hasn't notified me of any changes to my property value?
I received a decline in value reduction last year, do I need to file an application again this year?
Unless there is a change in ownership or new construction, this increase in value cannot exceed the original assessed value plus the annual inflationary factor not to exceed 2% per year.
Yes. The Prop 13 restriction does not apply to values adjusted under Proposition 8. Market value must be enrolled regardless of its percentage increase. If the market value increases and is equal to or greater than the
Prop 13 factored base year value, then the Prop 13 value is restored. The annual increase will be limited to 2%.
Is there a difference between filing a Decline-in- Value application and filing an Application for Changed Assessment (formal appeal)?
The Application for Changed Assessment (Assessment Appeal Application) is filed with the Clerk of the Board and an initiates a more formal process established to decide disputes between the Assessor’s Office and property owners. This form is used if property owners disagree with the value results of the Prop 8 review; the Assessor does not agree to a reduction; or the Assessor does not have sufficient time to complete a Prop 8 review.