In California, according to the terms of Proposition 13, property is assessed at 1 percent of its cash value on the day you buy it. Thereafter the assessor can raise the value of your property -- and therefore your tax assessment -- by no more than 2 percent annually.
Prop 13 didn't account for the situation that occurred in California during the mortgage meltdown that began in 2008, when property values declined several years in a row. Some homeowners may have expected their tax assessments to fall in tandem with the drop in property values. Instead, many of them found that tax assessors continued to assess their properties at the maximum annual 2 percent, as if the mortgage meltdown and ensuing recession had never happened. As of this publication, property values in many counties, especially in the Inland Empire, have not yet fully recovered the losses in value that began in 2008.
If you have experienced rising assessments as your property's value declined, you need to know how to appeal those assessments -- the only way to reduce your property tax in California.
Steps to Appeal Your California Property Tax
• Begin your appeal process by filing an Assessment Appeal Application, Form BOE-305-AH, which you can obtain from your county clerk or online. Some counties charge a $30 to $60 filing fee. Send the application to your assessor's office with a return receipt requested. In most cases, your application must be filed between July 2 and Sept. 15 of the current tax assessment period. This is not a one-time process. Be prepared to file yearly until your property's actual value matches the county's assessments.
• Familiarize yourself with the appeal procedures and your rights and obligations in the appeal process. Much of the information you'll need is in the California State Board of Equalization's Publication 30, "Residential Property Assessment Appeals." Reading the board's "Assessment Appeals -- Frequently Asked Questions" provides a good introduction to this complex process.
• An especially important part of the appeal process is the presentation of "comps," the comparable real estate listings that support your claim. Your real estate agent can help you in this process. Whenever the property at issue is valued at $100,000 or more, you also have a right to exchange your list of comps with the county assessor's list. Contact your assessor to begin the exchange process.
• Consider getting outside help with your appeal. The appeals board begins with the assumption that the county assessor's findings of value are correct. You have to provide sufficient evidence to overcome the findings of the assessor's appraisers, and this is seldom easy. Many California homeowners engage assessor firms that specialize in such appeals. In most cases, they charge only a percentage of the reduction, but this can be as much as 50 percent, so it pays to shop around.