Q: Why did I receive a blue notice card from the Office of the Assessor?
A: This notice provides the taxable value that will be used to calculate your 2011/12 property tax bill to be mailed in September. The taxable value of your property was adjusted to its market value as of January 1 under Proposition 8.
Q: What is market value?
A: Market value is what a property would sell for in the open market. The taxable value on the blue card you received reflects your property’s market value as of January 1.
Q: What is indexed base year value?
A: Indexed base year value, also known as Proposition 13 value, is the market value of a property when it was last purchased, underwent a change of ownership, or was newly constructed. The base year value is adjusted every year by the current rate of inflation as determined by the California Department of Industrial Relations. California law prohibits an inflation increase from exceeding 2%.
For example: A home purchased on March 1, 2010, for $100,000 would have a 2011 Prop 13 value of $100,753 ($100,000 X 1.00753 = $100,753).
Q: What is Proposition 8 (Prop 8)?
A: Passed by the voters in November 1978, Proposition 8 amended Proposition 13 to recognize declines in value for property tax purposes. As a result, the Assessor is required to annually enroll either a property’s Proposition 13 base year value adjusted for inflation or its market value as of January 1, whichever is less.
Q: What if I received a blue notice card but my taxes went up from last year?
A: If the taxable value is less than the indexed base year value printed on your blue value notice, you are still benefiting from a tax reduction under Proposition 8. All real property values assessed under Proposition 8 have the potential to jump from year to year as the real estate market fluctuates. It is important to remember that your taxable value cannot increase above your indexed base year value.
Q: How do I find the amount of my value reduction?
A: Your notice card shows both the market value and the Proposition 13 value. To determine the amount of your reduction, simply subtract the market value from the Prop. 13 value. (see sample notice card below)
Q: How does Proposition 8 work?
A: Proposition 8 allows the Assessor to temporarily lower assessments when the market value on January 1 is lower than the factored base year value (Prop 13 value) for that year. Each case is reviewed individually upon request of the property owner or may be automatically reviewed if the Assessor determines there is a need. Prop 8 assessments are temporary reductions that recognize the fact that the market value of a property as of the January 1 lien date has fallen below its current Prop 13 factored value. Once a Prop 8 assessment has been enrolled, the property’s value is reviewed each year to determine whether its market value is less than its Prop 13 value. Prop 8 values can change from year to year as the market fluctuates. When the market value of the Prop 8 property increases above its Prop 13 factored value, the Assessor will once again enroll its Prop 13 factored value. In no case may a value higher than a property’s Prop 13 value be enrolled.
For example:
• The following home was purchased for $95,000 in 2003.
• Each year after purchase, the Prop 13 value was increased by an increment of 2%
(95,000 x 1.02 = $96,900).
• Between 2003 and 2007, the market value of the home increased significantly, but
the property was taxed on the lower Prop 13 value.
• Between 2008 and 2010, the home decreased in value below the Prop 13 value and
was taxed on the lower market value.
• In 2011 the market value rose above the Prop 13 value, and the taxes were
returned to the lower Prop 13 value.
• Each year property taxes are based on the lower of the Prop 13 or the market value.
Q: Now that I have received a value reduction, what happens next?
A: Your taxable value will be reviewed every year until the market value of your home rises above its Prop 13 value. Please note that the value on which your taxes are based will change from year to year and could possibly rise at the same rate at which they fell. Unless you disagree with a value, there is no need to file for a review each year.
Q: What if I disagree with the taxable value on the notice?
A: If you believe the taxable value on your notice card is incorrect, you should call the Assessor at (559) 636-5100 and speak to an appraiser. If you still disagree, you should file an Assessment Appeal with The Clerk of the Board of Supervisors. The Assessment Appeal filing period is July 2 through November 30, 2011.
