In 1978, California voters said yes to Proposition 8, a rule that lets property taxes go down temporarily when a property’s value drops. This happens if the property’s current market value is less than what it’s assessed for tax purposes, set each January 1st.
If a property’s value drops from one January 1st to the next, its tax bill won’t automatically get lowered unless its value falls below the assessed value. For example, if you buy a house during a real estate market crash or if your property gets badly damaged by a natural disaster, you may qualify for a lower tax assessment under Proposition 8. But remember, this reduction is only temporary. The next year, your property tax may go back up based on the original assessed value plus the maximum 2% increase allowed under Proposition 13.
Under Proposition 13, the property’s original value increases by a maximum of 2% each year, capping its taxable value. If the market bounces back and the property’s value goes beyond its original value, the property tax goes up too. This increase isn’t limited to 2%; it follows the market’s growth until the property’s value exceeds its original value. Then, the lower value is used for taxes. The “original value” is what the property was worth when it was bought or built, adjusted yearly by the maximum 2%.
When am I notified of my assessed value?
Every year, usually by the end of June, the Assessor’s Office sends out notifications of assessed value to property owners, indicating the intended assessed value for that year’s assessment roll.