Proposition 8

Example 2: Property tax assessment administrative process should facilitate the ability for taxpayers to receive their full tax benefits due under the law.

The Assessor provides a free appraisal service each year to all taxpayers who believe the market value of their property has declined below the assessed value of their property.  The annual assessed values are published and posted to the Assessor website every July and taxpayers can then file a request for an informal review of the annual assessed value of the property.  This request can be made online, by mail or in person and minimal information is required.  Each market value review is processed by a real property appraiser.  This informal review process is separate from the formal assessment appeal process which is administered independently by the Sacramento County Clerk of the Board of Supervisors.    Currently, the Assessor’s decline in value review and the assessment appeal filing time periods are the same, July 1 – November 30, and if there is a disagreement about the results of the Assessor’s informal review, the taxpayer can then file a formal assessment appeal with the Clerk of the Board.  Sometimes taxpayers do not realize they have a concern about the assessed value until just after the November 30th deadline, at the time they pay the first tax bill installment on or just before December 10.  In order to ensure taxpayers have improved access to the tax benefits due under Prop 8, effective July 1, 2018 the Assessor’s decline in value review filing period will be extended an additional 30 days to December 31.  Note, this does not result in the extension of the assessment appeal filing period which is mandated by law and cannot be extended and that most decline in value requests are resolved through the informal review process.    

Below is a graphical representation of how property values assessed under Prop 13 are affected by Prop 8.

Additional Information – Prop 8/Decline in Value

Proposition 8, passed in November 1978, and amended Proposition 13 to formally legislate the process of reducing assessed values due to decline in market value for property tax purposes. Revenue & Taxation Code Section 51 requires the Assessor to annually enroll the lessor of either a property’s Proposition 13 base year value factored for inflation, or its market value as of January 1st.

Properties affected by a decline in market value are discovered by an owner notifying the Assessor. The Assessor's Office monitors real estate market conditions and can initiate the Prop 8 process on a mass basis and owners can notify the Assessor if they believe their property assessment should be reduce to reflect a decline in market value. 

Decline in market value (Prop 8) assessments are temporary reductions and the property’s value must be reviewed each year (as of the January 1st lien date) to determine whether the market value remains less than the Prop 13 factored value.

When market values are trending lower, not all properties will receive a reduction. The current market value must be less than the current Prop 13 factored base year value (assessed value) or there would be no tax relief for the taxpayer.

Prop 8 values are revised each year to reflect a current estimate of market value.  When a property is in Prop 8 status, the law allows for the assessed value to decrease or increase more than 2% per year.  In recovering markets this can be problematic for taxpayers because the annual tax bill may increase more than expected while the property is in Prop 8 status. To assist taxpayers with monitoring their assessed value, on July 1 of each year the annual assessed values, both Prop 13 and Prop 8, are posted to the Assessor’s website. 

While the property assessment is in Prop 8 status, the Assessor maintains the suspended Prop 13 base year values, including any increase by an annual inflation factor (2% max per year). When the market value of the Prop 8 property increases above its Prop 13 factored value, the Assessor must reinstate the lower Prop 13 factored value. This is a taxpayer protection and in no case may a value higher than a property’s Prop 13 factored value be enrolled.​

 

 

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