Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2017

Revenue and Taxation Code

Property Taxation

Part 2. Assessment

Chapter 3. Assessment Generally

Article 1. General Requirements

Section 402.5

402.5. Comparable sales. When valuing property by comparison with sales of other properties, in order to be considered comparable, the sales shall be sufficiently near in time to the valuation date, and the properties sold shall be located sufficiently near the property being valued, and shall be sufficiently alike in respect to character, size, situation, usability, zoning or other legal restriction as to use unless rebutted pursuant to Section 402.1, to make it clear that the properties sold and the properties being valued are comparable in value and that the cash equivalent price realized for the properties sold may fairly be considered as shedding light on the value of the property being valued. "Near in time to the valuation date" does not include any sale more than 90 days after the valuation date.

History.—Added by Stats. 1969, p. 1988, in effect November 10, 1969. Stats. 1972, p. 2014, in effect August 18, 1972, operative on the lien date in 1973, added " 'near in time to the lien date' does not include any sale more than 90 days after the lien date." Stats. 1980, Ch. 1081, in effect September 26, 1980, substituted "valuation" for "lien" before "date" in both the first and second sentences. Stats. 2014, Ch. 325 (AB 1143), in effect September 15, 2014, substituted "valuation" for "lien" after "after the" in the second sentence.

Generally.—Where all comparative sales available were considered, use of six such sales which complied with the criteria prescribed by the section was deemed sufficient to controvert a claim that a decision of county board of equalization was not supported by substantial evidence. Westlake Farms, Inc. v. Kings County, 39 Cal.App.3d 179.

Comparability can never be treated in absolute terms. Even relatively poor data can fairly be considered as shedding light on the value if it is the best or only data available. Midstate Theatres, Inc. v. Stanislaus County, 55 Cal.App.3d 864.

The purported use of this method of valuation is invalid when based upon sales of other properties which are not subject to the same limitation on use as the property in question. Jones v. Los Angeles County, 114 Cal.App.3d 999.

Accuracy.—Market data on recent sales of the property to be assessed and comparable properties, when such data is available, is the most accurate way of arriving at the assessed value of the property. Dennis v. Santa Clara County, 215 Cal.App.3d 1019; Los Angeles County v. McDonnell Douglas Corp., 219 Cal.App.3d 715.

Usability.—A classification based on topography and present use without additional evidence as to the highest and most profitable use will not support a finding of comparability. Dressler v. Alpine County, 64 Cal.App.3d 557. This valuation method was properly used to assess the value of commercial real estate for tax purposes because the cost approach was not the only approach available to value improvements. Olen Commercial Realty Corp. v. County of Orange (2005) 126 Cal.App.4th 1441.

Near in time.—The provision for exclusion of any sale more than 90 days after the lien date is restricted to fair market value assessments and does not apply to use of the capitalization of income method and evidence of income earned more than 90 days after the lien date. Bank of America v. Fresno County, 127 Cal.App.3d 295.