Explanation of Property Tax Reduction
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 2013/14
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, 2011, for $100,000 would have a 2012 Prop 13 value of $102,000 ($100,000 X 1.02 = $102,000).
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 to the left)