California Prop 8: Decline-in-Value Reviews Explained

How Proposition 13 and Proposition 8 fit together

Under Proposition 13, a home is reassessed only when it changes ownership or is newly built. In between, its base year value can rise with inflation by no more than 2% a year. California assesses a home at the lower of that factored base year value or its market value on January 1.

When the market value is the lower one, the Assessor enrolls it instead. The Riverside County Assessor describes the reduction as temporary and reviewed every year. When values recover, the taxable value can rise by more than 2% in a year until it reaches the Proposition 13 value again, as Orange County's Assessor explains.

Step 1: ask the Assessor

The State Board of Equalization notes that talking to the Assessor's office first may fix a problem without a formal appeal. Counties run this review differently:

Step 2: the formal appeal

If the review doesn't settle it, the formal route is an Assessment Appeal Application (BOE-305-AH), using the version from the county where the home is assessed. In counties where the Assessor doesn't mail value notices to every owner by August 1, the regular filing period is July 2 through November 30.

Each county clerk handles filing and fees its own way:

• Los Angeles: file online or on paper; a $46 non-refundable filing fee per application, with a hardship waiver you can request.
• Orange: no filing fee; an application prepared online must still be printed, signed and mailed or delivered before the deadline.
• Sacramento: a $30 non-refundable processing fee per application; paper only, with the original signed application submitted to the Clerk of the Board.
• San Diego: filing through the county's online portal, with no application fee listed.

An application is on time if, by the deadline, it is delivered in person by close of business, postmarked by the U.S. Postal Service, sent by a commercial carrier that verifies the send date, or e-filed where the county allows it. In San Diego County, a home or office postage-meter date does not count as a postmark.

Evidence that counts

The question is your home's market value as of January 1 of the year you file. Appeals boards consider comparable sales, replacement cost or income; for homes, sales of similar properties are usually the most reliable. Mind the dates: a board can't admit comparable sales dated more than 90 days after the January 1 valuation date. So the sales that can help are those from before January 1 and up to 90 days after it.

Risks and timing

• The board decides the value, in either direction. It can raise, lower or keep the assessment based on the evidence.
• Pay your taxes on time. You must still pay while an appeal is pending; a reduction is refunded with interest.
• Hearings can take a while. Boards are expected to hear and decide appeals within two years of filing, and you get at least 45 days' notice of the hearing.
• The board's decision is final. To go further you first file a claim for refund with the county Board of Supervisors and then an action in superior court.

Check your exemption too

A decline-in-value review and the homeowners' exemption are separate. The exemption takes $7,000 off the taxable value of a qualifying owner-occupied home and is claimed once with the county assessor; see exemptions to check first.