Section 1. (a) The maximum amount of any ad valorem tax on real property shall not exceed one percent (1%) of the full cash value of such property. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.When the real estate market goes down, the current market value of real property is less than the current assessed (taxable) factored base year value as of the lien date, January 1, the real property owners are entitled to the tax reduction. Proposition 8, passed by California voters in 1978, is codified by section 51(a)(2) of the Revenue and Taxation Code:
Its full cash value, as defined in Section 110, as of the lien date, taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value.In the last two years, the market value of the real property have plummeted by more than 50%. If you're not agree with assessed value, which reduced just 4 or 5 percent, you should appeal. In order to appeal, you need to do some research.
I was shocked with my finding. Five identical properties in the same community, built and purchased on the same year, and assume no additional improvement since purchase, four of them had substantial reduction in assessed value ranging from 17% to 24%. One had only 5% reduction. Why?
On the Net:
- California State Board of Equalization Frequently Asked Questions – Proposition 8 / Decline in Value
- Truth About Property Tax Prop 8 Decline in Value
- Brown Sues to Block Property Tax Rip-Off
