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California Proposition 8: Decline in Value Reassessment

Prop 8 is a statewide California program to lower your Property Taxes during real estate market downturns. If the MARKET VALUE of your home is less than your ASSESSED VALUE you might be paying too much in property taxes! In this article I tell you how to apply for Prop 8 ca.

What is California Proposition 8?

Over the longterm, real estate values go up. In the short term, real estate values can swing up and down. California passed a  constitutional amendment in 1978, known as Ca Proposition 8 that allows homeowners to request lowering their property taxes if their property value has declined. 

LA Assessor Resources for CA Property Tax Proposition 8 

Dedicated Landing Page:

https://assessor.lacounty.gov/decline-in-value/

Form E-23 is a detailed informational pamphlet:

How do I apply for California Proposition 8?

California’s Proposition 8 is FREE to apply and it is a simple one-page application so you can fill it out yourself.  The application is a 3 step process.

Step 1: Fill out a Decline-in-Value Reassessment FORM:

The form is RP-87 

 Step 2: Attach 2-3 COMPS

Although you don’t need to attach COMPS with your request I would highly recommend that you do. If you don’t send any COMPS the assessor will look up and choose COMPS for you. 

You can search for comparable sales yourself using Public Websites like Zillow or the assessor’s database here:

http://maps.assessor.lacounty.gov/mapping/viewer.asp

If Finding Comps is too difficult- you can ask your local real estate agent or title rep to help you find them. 

Step 3: Mail it in

 Here is the mailing address to submit your Prop 8:

Los Angeles County Assessor, 500 West Temple Street, Room 286, Los Angeles, CA 90012

California Proposition 8 EXAMPLE

A property was purchased for $500,000. During a three-year period, the real estate market declined and recovered. The property owner filed for a decline-in-value reassessment. The following table shows the trended base value of the property, the market value of the property, and the assessed value of the property. Assuming a 2% Annual C.P.I.:

 Base Value TrendedMarket ValueAssessed Value
Year 1$500,000$500,000$500,000
Year 2 $510,000$480,000$480,000
Year 3$520,200$510,000$510,000
Year 4$530,604$550,000$530,604

Because you can never exceed your base value trended, you only stand to lower your taxes by attempting to adjust your assessed value. In the example above, if you had not filed a prop 8 in year 2 you would have been taxed on an assessed value of $510,000 instead of $480,000, assuming a 1.25% property tax on the $30,000 difference in assessment, you save $375 in year 2.

You may file a Prop 8 every year (although in a rising market there is no benefit) and your base year trended values increases by an annual inflation factor of no more than 2% per year.

Prop 8 Ca FAQ

Does Filing a Prop 8 hurt my resale value?

No. The assessed value of your property which property taxes are based on doesn’t have any influence on the resale value of your home. It is very common for Assessed Values and Market Values to be different because of Proposition 13. 

How much Does Filing a Prop 8 cost?

Filing a Prop 8 is FREE. 

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