There’s nothing quite like the moment when a new homeowner opens their first property tax bill in California. I’ve seen the look of shock hundreds of times over my career – that moment when the reality of Proposition 13 and our unique property tax system really hits home. Whether you’re looking to lower your assessment or you’re required to report a change in ownership, understanding how to navigate reassessment in the Golden State can save you significant money and headaches.
Understanding California’s Unique Property Tax System
Before diving into the reassessment process, let’s get clear on what makes California’s property tax system so different from most other states. It all goes back to 1978 when voters passed Proposition 13, which fundamentally changed how properties are taxed here.
Under Prop 13, your property tax is generally limited to 1% of the assessed value at the time of purchase, plus voter-approved local assessments. That assessed value can only increase by a maximum of 2% annually – regardless of how much your actual property value increases. This creates those situations where neighbors in identical homes might pay wildly different property taxes simply because one bought decades before the other.
When I started in this business back in 2003, I worked with a young couple buying in Pasadena next door to an elderly woman who’d owned her identical home since the 1970s. Their annual property tax bill was nearly 1,200! That’s Prop 13 in action – for better or worse.
When Can You Request a Property Tax Reassessment in California?
There are several situations where you might want (or need) to request a reassessment:
- When your property value has declined below the assessed value
- After making significant property improvements (this is actually required)
- Following damage or destruction to your property
- When transferring property between family members (with potential exclusions)
- After a change in ownership (usually triggering an automatic reassessment)
The most common scenario I see – especially during market downturns – is homeowners seeking a temporary reduction when their property value falls below the assessed value. This was particularly common during the 2008-2012 housing crash. I had clients throughout LA County, from Manhattan Beach to Monrovia, who saved thousands through temporary reductions.
The Step-by-Step Process to File for Reassessment
If you believe your property deserves reassessment, here’s my recommended approach based on two decades of helping clients through this process:
For Decline-in-Value Reassessments:
- Research your current assessed value – This appears on your annual tax bill or can be found on your county assessor’s website
- Gather evidence of your property’s current market value – Recent comparable sales, appraisals, or evidence of neighborhood decline
- Complete the appropriate county form – Usually called “Decline-in-Value” or “Proposition 8” reassessment request
- Submit by the county deadline – Typically between January 1 and September 15, though it varies by county
- Prepare to appeal if necessary – If your request is denied, you can appeal to your county’s Assessment Appeals Board
What I’ve seen in my years working this market is that success often depends on the quality of your comparable sales data. My wife Elena is particularly good at helping our clients gather this information when they’re preparing reassessment requests.
For Reporting New Construction or Improvements:
This is an area where many homeowners get themselves in trouble. Between you and me, I’ve seen plenty of people try to fly under the radar with unpermitted improvements, only to face significant penalties later.
- File a “Notice of Completion” with your county recorder when your project is finished
- Complete the assessor’s new construction form – Usually required within 30-90 days of completion
- Provide construction costs and permits – Be prepared to document your expenses
- Expect a supplemental assessment – The value of your improvements will be added to your base assessment
I had clients in Sherman Oaks who completed a major kitchen renovation and failed to report it. Years later during a refinance, the appraiser noted the discrepancy, and they ended up paying back taxes plus penalties. Not worth the risk!
Common Mistakes and Misconceptions About California Reassessments
Over my 20+ years helping Californians navigate property taxes, I’ve seen several recurring misunderstandings:
Misconception #1: “My property will be automatically reassessed if values decline.”
Reality: In most counties, you must proactively request a Prop 8 decline-in-value reassessment. The assessor won’t do it for you.
Misconception #2: “If I get a decline-in-value reduction, my new lower base will be permanent.”
Reality: Decline-in-value reductions are temporary. When market values recover, your assessment will increase (up to your Prop 13 base plus allowed increases).
Misconception #3: “Minor home improvements don’t need to be reported.”
Reality: Technically, any improvement that increases value should be reported, though most assessors focus on significant projects.
Misconception #4: “I can transfer my low property tax base to any new home I buy.”
Reality: While Propositions 60, 90, and now 19 provide some tax base portability, there are strict requirements and limitations.
Back in 2010, during the housing crash, I worked with a client in Burbank who received a substantial temporary reduction. When the market recovered around 2015, he was shocked when his assessment jumped significantly in one year. I had to remind him that the reduction was always temporary – the assessor was just catching him back up to his Prop 13 trajectory.
Understanding Proposition 19 and Its Impact on Reassessments
The property tax landscape in California changed significantly when voters approved Proposition 19 in November 2020. This replaced the older Propositions 58/193 (parent-child transfers) and expanded Propositions 60/90 (senior transfers).
Under Prop 19:
- Homeowners over 55, severely disabled, or victims of natural disasters can transfer their tax base to a new home anywhere in California up to three times
- Parent-to-child transfers of primary residences may qualify for reassessment exclusion only if the child actually uses the property as their primary residence
- The parent-child exclusion is limited to the current assessed value plus $1 million
This represents a major change from previous rules. I remember when these changes went into effect – my phone was ringing constantly with clients in places like Calabasas and Newport Beach trying to understand how these new rules would affect their estate planning.
Regional Differences Across California Counties
While property tax laws are statewide, I’ve noticed significant differences in how various counties handle reassessment requests:
Los Angeles County: Generally requires substantial documentation for decline-in-value requests and has a reputation for being thorough in their reviews.
Orange County: In my experience, tends to be somewhat more responsive to decline-in-value requests but is very aggressive about identifying unreported improvements.
San Francisco County: Given the city’s high property values, the assessor’s office tends to scrutinize high-value properties particularly closely.
Riverside/San Bernardino Counties: During the 2008 crash, these counties were more proactive about reassessments due to the significant value declines in the Inland Empire.
I personally find that Los Angeles County can be the most challenging to work with simply due to their volume of properties. A client of mine in Silverlake waited nearly eight months for their decline-in-value review during the last housing downturn – much longer than my clients in smaller counties experienced.
My Personal Advice After Decades in California Real Estate
After helping countless clients through reassessment processes since 2003, here’s what I tell everyone about navigating California property taxes:
First, be proactive but realistic. If your property value has truly declined below your assessed value, absolutely file for a reduction – but don’t expect success if you’re just fishing for a lower bill without supporting evidence.
Second, be scrupulously honest about improvements. The temporary “savings” from not reporting that new bathroom or addition isn’t worth the potential penalties and back taxes when it’s eventually discovered.
Third, timing matters for decline-in-value requests. File as early in the year as possible – preferably January or February – to maximize your chances of review before tax bills are issued.
Fourth, keep excellent records. Whether you’re reporting improvements or requesting a reduction, documentation is your best friend. Save all permits, contractor invoices, and comparable sales data.
Finally, don’t hesitate to appeal if your request is denied but you have strong evidence. The appeals process can be time-consuming but is often successful for well-prepared homeowners.
California’s property tax system is complex and sometimes frustrating, but it also provides significant protections against skyrocketing tax bills in our high-value real estate market. Understanding how to navigate reassessments – whether you’re seeking a reduction or properly reporting improvements – is an essential skill for any California homeowner.
And remember – while I’ve seen the process work similarly across the state from my years in the business, always check your specific county assessor’s website for local forms and deadlines. Those details matter when you’re trying to successfully navigate California’s unique property tax landscape.
