Frequently Asked Questions - About Real Property

What is a "Proposition 8" value?

Sometimes the market value of a property on January 1 has fallen below the adjusted base year value. The assessor is obligated to enroll the lesser of the adjusted base year value or market value. (This is sometimes referred to as a "Proposition 8" assessment, after the November 1978 proposition that amended Article XIII A to allow these reductions in value.)

The assessed value of my property increased more than 2 percent this year. There was no change in ownership or new construction. Doesn’t Proposition 13 limit annual increases in value to 2 percent?

Under Proposition 13, base year values may not be increased more than 2 percent per year. A property assessed under Proposition 8, however, is not restricted to the 2 percent increase. For example, in a situation where a property’s value increased 10 percent since the prior lien date, but the value is still below the Proposition 13 adjusted base year value, the new increased Proposition 8 value will be enrolled.

What is considered a change in ownership?

In order to meet the definition of change in ownership for property tax purposes, a transfer of real property must convey (1) a present interest in the real property, (2) the beneficial use of the property, and (3) rights that are substantially equivalent in value to that of the fee interest in the property. Gifts, inheritances, and purchases of real property can all qualify as changes in ownership; it may not matter whether the transfer is voluntary or involuntary.

Does a transfer of real property between husband and wife result in a reappraisal?

No. Transfers of property between husband and wife do not result in a reappraisal. This includes transfers due to a divorce decree or the death of a spouse.

What is a Change in Ownership Statement?

Whenever there is a change in ownership of real property or a manufactured home, state law requires the transferee (the party acquiring the property) to file this form in the county where the real property or manufactured home is located. If the form is not filed within 45 days from the date of the assessor's written request penalties will be applied. Information furnished on this form by the transferee assists the assessor in fulfilling his legal responsibilities. A completed change in ownership statement is not open to public inspection.

What constitutes new construction?

"Any substantial addition to land or improvements, including fixtures."
"Any substantial physical alteration of land which constitutes a major rehabilitation of the land or results in a change in the way the property is used..."
"Any physical alteration of any improvement which converts the improvement or any portion thereof to the substantial equivalent of a new structure or portion thereof or changes the way in which the portion of the structure that had been altered is used."
"Any substantial physical rehabilitation, renovation or modernization of any fixture which converts it to the substantial equivalent of a new fixture or any substitution of a new fixture."
Further clarification about what constitutes assessable new construction may be found in Letters To Assessors Nos. 78/188, 79/204, and 80/77.

What are supplemental assessments?

The supplemental roll provides a mechanism for placing reappraisals under Article XIII A into immediate effect. The increase (or decrease) in assessed value resulting from the reappraisal is reflected in a prorated assessment (the supplemental assessment) that covers the portion of the fiscal year (July 1-June 30) remaining after the date of change in ownership or new construction. The supplemental assessment statutes apply to any property subject to Article XIII A that has undergone a change in ownership or been newly constructed since July 1, 1983.For changes in ownership or completed new construction occurring between January 1 and May 31, two supplemental assessments are issued. The first covers the portion of the current fiscal year remaining after the date of the event; the second covers the ensuing fiscal year in its entirety.Exemptions for which the assessee is otherwise eligible apply to supplemental assessments. An exemption, if in effect, or if applied for and granted, as the case may be, is applied to the amount of the supplemental assessment.

For further clarification on supplemental assessments refer to the Board’s Letters To Assessors Nos. 83/128 and 85/75.