When it comes to property taxes, which are due in two biannual installments in California, homeowners should be aware of every possible outlet for small amounts of relief.
This is especially true in a luxury real estate market like Coronado where the median price of a home in May was $2.4 million according to Redfin.
As your trusted real estate agent, I want to make sure you are educated on every California law and proposition that correlates with real estate or property taxes.
Proposition 8, which California voters passed in 1978, is just the sort of constitutional amendment that all homeowners should be hyper aware of, especially when it comes time to pay those property tax installments.
What is Proposition 8?
Proposition 8 allows a temporary reduction in your property’s assessed value when the property’s market value has fallen below its factored base year value as of the lien date, January 1.
Why is this relevant to your taxes?
Since an assessor will use the assessed value of your home to determine property taxes, determining a decline in the value of your property (with Proposition 8) could significantly reduce your taxes.
This decline in value is usually temporary.
Typically, if you purchased your property during a time when there was a dramatic fall in the real estate market, or if your property received damage from a storm or fire, your property will likely benefit from a Proposition 8 reassessment.
Keep in mind that the factored base year value is the market value established in 1975, or when the property last changed ownership, or when the property was newly constructed.
If you believe your property has declined in value since any of those three dates, I would recommend taking the steps to have your property considered for Proposition 8.
Property consideration for Prop 8
To start, the review process is carried out by your county assessor, so begin by looking at their websites for specific filing requirements and procedures.
As indicated on their websites, some assessors state that they are reviewing certain types of properties purchased between specific time periods.
When filing a claim form, provide information with any supporting evidence of your property’s decrease in value, specifically with the sale information of comparable properties to your own.
I would recommend finding a property that was sold with similar features and location to your own home as close to January 1 as possible.
Proposition 8 reassessments last at least one year, and the assessed value may increase or decrease as determined annually. The assessed value will never exceed the value of the base year as factored by Proposition 13.
Keep in mind that the value of your home may even be reduced even after paying your tax bill!
Here to keep you informed
As a trusted real estate agent, I am here to keep you informed about the most up-to-date information of all things real estate. It is my goal to make sure you understand the essential California propositions that will help support your home-owning journey.
If you have any questions about Proposition 8, or are interested in learning more about the potential to reduce the assessed value of your home, don’t hesitate to reach out at 619-568-0568 or info@simonerealestategroup.com.
I am always here to help answer any questions and keep you informed on the ever-evolving landscape of real estate properties!
