California Property Tax Rules

California taxes property on its acquisition value, not its current market value. When you buy (or complete new construction), the assessor sets a base year value equal to market value on that date. From then on, Article XIII A of the state constitution limits growth to 2% per year or inflation, whichever is lower — producing your "factored base year value." For 2026-27 the inflation factor is 2%, the maximum.

The tax rate is capped at 1% of assessed value, plus voter-approved debt (school and infrastructure bonds) and direct levies like Mello-Roos or parcel taxes. Typical total bills run about 1.1–1.25% of assessed value depending on the county and tax rate area.

Reassessment to market value happens in only two situations: a change in ownership (R&T §§60–69.6) or completed new construction (R&T §§70–74.8). Routine maintenance, most remodels-in-kind, and many specific exclusions (seismic retrofits, solar systems, disabled-access improvements) do not trigger reassessment. Long-time owners in appreciating neighborhoods often pay far less than new buyers of identical homes — that's by design, and it's why your appeal target is your own factored base year value or current market value, not what your neighbor pays.

Proposition 8 (R&T §51(a)(2)) requires the assessor to enroll the lower of your factored base year value or the property's market value on January 1. If the market dropped below your Prop 13 value — common for recent buyers — you're entitled to a reduction for that year.

Two ways to claim it: (1) an informal decline-in-value review — most assessors accept a simple request form with recent comparable sales, free, typically available roughly January through October (varies by county); and (2) a formal assessment appeal (BOE-305-AH) filed with your county's Assessment Appeals Board during the regular window. Filing the formal appeal protects your rights if the informal review stalls — you can do both.

Prop 8 reductions are temporary and reviewed every year. While in decline status, your value can rise more than 2% per year as the market recovers — but never above the factored base year value. A big jump after a Prop 8 year is legal; a jump above your factored Prop 13 value is not.

After you buy or finish construction, the assessor issues a supplemental assessment for the difference between the old and new values, prorated from the event date (R&T §75.31). It arrives on top of the regular bill and is the most commonly missed appeal deadline in California: you have 60 days from the notice date to appeal — this window is independent of the July 2 – Nov 30 regular season.

Escape assessments (value the assessor missed in prior years, R&T §1605) also carry a 60-day appeal window and can reach back several years. Roll corrections (R&T §§51.5, 4831) fix errors, and refund claims(R&T §5097) can generally be filed within four years of payment if you overpaid.

1. 1Check the numbers. Compare your factored base year value to the Jan 1 market value using recent comparable sales. If market is lower — or the assessor's records are wrong (square footage, condition) — you have a case.
2. 2Try the informal route. Most county assessors offer a free decline-in-value review. Fast, no hearing, and it doesn't waive anything.
3. 3File BOE-305-AH. The Assessment Appeal Application goes to your county's Clerk of the Board between July 2 and Sep 15 / Nov 30 (60 days from notice for supplemental/escape bills). Filing fees range $0–$50 by county.
4. 4Exchange evidence & hearing. The Assessment Appeals Board (or a hearing officer for lower-value homes) hears both sides. On owner-occupied residential appeals the assessor generally bears the burden of proof. Bring closed sales nearest Jan 1.
5. 5The two-year rule. If the board doesn't decide within 2 years of filing (R&T §1604(c)), your opinion of value is enrolled until it does. Pay your taxes on time regardless — appeals don't pause payment.