The part of Prop 13 everyone knows
Proposition 13, passed in 1978, set the basic shape of California property tax. Your property's assessed value is generally set at its purchase price, called the base year value, and can rise by at most 2% a year after that. The tax rate is capped at 1% of assessed value plus voter-approved debt.
For long-held property this produces assessments well below market value, which is why many California owners assume there is never anything to appeal. That assumption misses the other half of the system.
The part fewer owners know: Proposition 8
Proposition 8, passed later in 1978 and codified in Revenue and Taxation Code section 51, requires the assessor to enroll the lower of two numbers each year: the factored base year value, or the property's market value on January 1, the lien date. When market value falls below the Prop 13 number, the county must use the market number.
A Prop 8 reduction is temporary by design. The assessor reviews it every year, and as the market recovers, the enrolled value can rise back toward the factored base year value faster than 2% a year, because the 2% cap applies to the base year value, not to a Prop 8 value. It can never rise above the factored base year value.
Two consequences follow for commercial owners:
- The question is live every single year. A building bought near a market peak, or a building whose income has weakened because of vacancy or soft rents, can be worth less on the lien date than its factored base year value. That is a decline-in-value case, and it exists whether or not the county noticed.
- A reduction won last year does not take care of this year. Because the assessor reviews Prop 8 values annually and can restore them as markets recover, owners who treat an appeal as a one-time event often watch the benefit disappear. This is one of the reasons we re-review every client's assessment each year and file again when there is a case.
What the appeal actually looks like
Every county opens its regular assessment appeal window on July 2. It closes September 15 in counties that mail value notices to every owner by August 1, and November 30 in the rest, which includes Los Angeles and most other large counties. The date printed on your county's materials controls, and our deadlines reference tracks the major counties.
The evidence question for a commercial decline-in-value case is usually about income. Assessment appeals boards in California give real weight to the income approach for leased property: actual rents, actual vacancy, actual expenses, and the capitalization rates buyers in your market are paying. Sales of comparable properties matter too, particularly for owner-occupied buildings where there is no lease income to capitalize. We walk through the evidence categories in What Counts as Evidence in a Commercial Property Tax Appeal.
Note that base year value disputes, which challenge the number set when you acquired the property, run on different rules and a much shorter clock than annual decline-in-value filings. If you believe the base year value itself was set too high, the timing matters and it is worth checking quickly.
The honest caveats
An assessment appeals board equalizes values. Under Revenue and Taxation Code section 1610.8, that includes the power to raise a value the evidence does not support, not only to lower one. Screening for that exposure before filing is part of doing this properly.
And a Prop 8 case only exists when market value is genuinely below the factored base year value on the lien date. For property held for decades at a low base year value, there is often no case at all, and the right answer is to leave the assessment alone.
Where to start
Find your factored base year value on your most recent assessment notice, then ask what your building was actually worth on January 1. If the second number might be lower, that is worth checking against the county's own data before the window closes. Start a free analysis and we will run the comparison. If there is no case, you will hear that plainly, and it costs nothing.
More on how California fits into the bigger picture in the California guide.