Will A Decline In Market Value Reduce My Property Taxes?

It has been widely reported that the property values of single-family homes and condominiums throughout most of the State have been declining. If you’ve purchased your home in the past few years, it is likely that your Assessed Property Value is higher than your home’s current value.

All residential property taxes are determined based on the value as of January 1st. If your residence is overtaxed due to a falling market you may have it reassessed to current market value to save money on your tax bill.

Proposition 13

In 1978, California voters passed Proposition 13, which substantially reduced property tax rates. As a result, the maximum levy cannot exceed 1% of a property’s assessed value (plus bonded indebtedness and direct assessment taxes). Increases in assessed value are limited to 2% annually. Only four events can cause a reappraisal:

• A change in ownership
• Completed new construction
• New construction partially completed on the lien date (January 1)
• A decline-in-value (see Market Value Decline - Prop. 8)

Click here To read the law associated with Proposition 13

Proposition 8 – Temporary Decline in Value

In 1979, California voters passed Proposition 8, a constitutional amendment that requires the Assessor to temporarily lower the assessed value of property 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.

Under Proposition 8 the Assessor will review the market value as of January 1^st, and enroll for the following tax year the lesser of:

• Factored-Base-Year Value Proposition 13 or
• Market Value Proposition 8

Reductions in assessed value under Proposition 8 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. The assessed value are reviewed annually until the Factored-Base-Year value is again lower than market value and is reinstated.

Click here To read the law associated with Proposition 8 - Revenue and Taxation Code Section 51

Your Current Tax Bill

To obtain a quote of your current Tax Bill, you can go to the follow County Tax Assessor website:

Current Market Value Of Your Home

To get a rough estimate of the current value of your home, type in your address below:

Property Address

City, State

If Your Assessed Property Value Is Higher Than Your Home’s Current Value ...

Important factors to remember related to a decline in value review on your property:

• All real property qualifies for Proposition 8 review.
• Property acquired after January 1, 2010 are not eligible for Proposition 8 review for the 2010-11 tax year.
• The Assessor will be valuing the property as of the most recent January 1st.
• The total assessed value will be reviewed.
• A comparable sales analysis will be done on your property to determine whether you qualify for the provisions of Proposition 8.
• Comparable sales utilized must record between October 1, 2010 and March 31, 2011.

If your property's market value on January 1^st is less than its assessed value, as it appeared on the previous annual assessment roll, then you may be entitled to an assessment review. Obtain an Assessment appeal form called a "Request For Informal Assessment Review" from your County Assessor's office, or you can go to the follow County Tax Assessor website:

To appeal your property taxes, please refer to your local assessor's office for official deadlines. The specific county deadlines are as follows:

• The fiscal year for property taxes begins July^1st and ends June 30^th the following year.
• When submitting during the review period, the application applies to the following tax year.
• When submitting during the appeals period, the application applies to the current tax year.

Do not make any decisions based on this data before validating your decision with the appropriate County office.

If you do not agree with the roll value resulting from the informal review ...

You may file an Assessment Appeal form with the Office of the Clerk of the Board of Supervisors between Appeal Start and Appeal End period. Assessment appeal forms can be obtained from your Clerk of the Board of Supervisors website.

Links to more information

You may be eligible for one of the following:

• Homeowner's Exemption: Property owners may file an application for a Homeowners' Exemption on a residence that is both owned and occupied as the principal place of residence as of 12:01 a.m. on January 1. The exemption reduces the assessed value by $7,000 and reduces the property tax bill. This translates to a savings of about $70 per year. Homeowner's Exemption Form can be obtained from your Clerk of the County Assessor website.
• Propositions 60 and 90: Proposition 60 relates to transfers within the same county (intra-county). Proposition 90 relates to transfers of base value from one county to another county in California (inter-county).

Disclaimer

This web page is intended for educational and informational purposes only and is not to be construed as Legal nor Financial advice. If you require legal or other expert advice, you should seek the services of a competent attorney or other professional.

Every reasonable effort has been made to ensure the accuracy of the sale comparables and other data provided; nevertheless, some information may not be accurate. housePriceSold.com assumes no responsibility arising from use of this information. THE DATA ARE PROVIDED WITHOUT WARRANTY OF ANY KIND, either expressed or implied, including but not limited to, the fitness for a particular purpose.