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Reduce Your California Property Taxes

What is Proposition 8?

In 1978, California voters passed Proposition 8, a constitutional amendment that allows a temporary reduction in assessed value 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 assessed value as of January 1.

If you have good reason to believe that the assessed value of your real property is too high, filing an Application for “Decline-In-Value” Reassessment (Prop. 8) form with the Assessor’s Office, as allowed by Proposition 8, is usually the first step to take. A free application form is available from the Assessor’s Office, and there is no charge for filing. The deadline for filing this form in San Diego County is May 30, 2008.

You will be notified by the Assessor’s Office if any change in the assessed value of your property will be made by the Assessor. Any adjustments made to your assessed value will apply to the next tax year. For example, if an application submitted in February 2008 results in a reduced assessed value, the new reduced assessed value will be on the 2008-2009 annual tax bills. The 2008-2009 annual tax bill covers July 1, 2008 through June 30, 2009. When the Assessor’s Office notifies you of their decision regarding your Application for “Decline-In-Value” Reassessment (Prop. 8), and you are not satisfied with the results, you may still file an Application for Changed Assessment with the Assessment Appeals Board during the regular filing period of July 2 through November 30.

The Proposition 8 reduction is temporary; it applies only to the year of the application. Each year, as of the lien date (January 1), the Assessor will review the properties with a Prop. 8 assessment to verify whether the conditions that resulted in a decline in value still exist. If the market value of the property increased, the Assessor will adjust the assessed value up to the fair market value. Please keep in mind that the Assessor, in this case, is not limited to a 2% annual increase, but the new assessment will not exceed the original trended base year value.

What is 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:

1. A change in ownership;

2. Completed new construction;

3. New construction partially completed on the lien date (January 1); or

4. A decline-in-value (Proposition 8)

Proposition 13 was adopted by California voters in 1978, and changed the definition of taxable value for all real property in the state. Taxable value of real property is defined as the lesser of:

o Factored base year value, or

o Market value on lien date (January 1st), whichever is lower

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