Annual value reviews in a changing real estate market

Since the decline of the real estate market in 2008, the Assessor has worked diligently to review taxable values in order to fulfill the mandate of Proposition 8. Passed in 1978, Proposition 8 requires the Assessor to annually enroll either a property’s factored base year value or its market value on January 1, whichever is less. The California Board of Equalization defines a factored base year value as:

1) market value as established in 1975 or
2) market value as established when the property last changed ownership or
3) market value when the property was newly constructed.

Also referred to as “Prop 13” values, factored base year values cannot increase more than 2% in a given tax year. When current market values replace higher Prop 13 values on the tax roll, the market value is commonly referred to as a “Prop 8” value. A Prop 8 value may increase or decrease more than 2% each year as the real estate market fluctuates, but it will never exceed a property’s Prop 13 value. When the current market value of a property receiving Prop 8 benefits exceeds its Prop 13 value, the Assessor reinstates the Prop 13 value.



Example:
• The above graph illustrates a home purchased for $95,000 in 2003.
• Each year after purchase, the home’s Prop 13 value was increased by an increment of 2% ($95,000 x 1.02 = $96,900).
• Between 2003 and 2007, the market value of the home increased significantly, but the property was taxed on the lower Prop 13 value.
• Between 2008 and 2010, the home’s value decreased below the Prop 13 value and was taxed on the lesser market value.
• In 2011 the market value rose above the Prop 13 value, and the taxes were returned to the lesser Prop 13 value.
• Each year property taxes are based on the lesser of two values: Prop 13 or market.

Automatic value review of residential properties

Since the beginning of the decline of the real estate market in 2008, the Assessor has proactively reviewed the taxable values of residential properties on a massive scale. Utilizing computer automation and housing market data from throughout Tulare County, nearly 70,000 taxable values were reviewed in 2011 resulting in more than 42,000 properties being assessed at market value. If your single family residence was included in the Assessor’s proactive value review program, you will receive a blue value notice indicating your property tax value for the 2011/12 tax year.



If your opinion of your property’s market value is less than the taxable value printed on your value notice, please contact our office and ask to speak to an appraiser. Please be prepared to provide some market evidence to support your opinion of value, such as completed sales of similar properties that sold within 90 days of January 1. You can contact a local real estate professional for this kind of information or do your own research on the Internet.

Assessment appeals vs. value reviews by the Assessor

If the taxable value of your property was not automatically reduced or you disagree with its assessed value, it is your right to file an appeal with the Board of Supervisors. To file an appeal, you must submit an Application for Changed Assessment to The Clerk of the Board of Supervisors between July 2 and November 30, 2011. Due to the high volume of appeals filed since 2008, there may be some delay in your taxable value being reviewed by the Assessor. California law allows the Assessor two years to review taxable values under appeal. To download an Application for Changed Assessment and read more about the appeal process, click here.

A less formal method of requesting a review of your property’s taxable value is to submit a Request for Value Review application directly to the Office of the Assessor. Applications for the 2011/12 tax year are available beginning December 1 and must be submitted to the Assessor no later than December 31, 2011, to be considered for the 2011/12 tax year. Applications received after the December 31 deadline will be considered for the 2012/13 tax year. While there is no cost to file a Request for Value Review, these less formal reviews are completed by the Assessor only as time and resources permit.

Prior to filing a formal appeal or the less formal value review, please keep in mind that your property may have already been automatically reviewed for 2011/12.

While a Request for Value Review affects only annual tax bills, Applications for Changed Assessment can impact several types of assessments. For more information about the appeals process as well as filing deadlines, go to The Clerk of the Board of Supervisors web site.

Please Remember

• Property tax payments are due as indicated on your bill. If your assessed value is reduced, the Tulare County Tax Collector will issue a notice of correction and revised tax bill, which may include a refund.

• If your property taxes are reduced because your taxable value is adjusted by value review or appeal, your taxes will fluctuate as the real estate market recovers. There is no need to apply each year for value review. Your assessment will automatically reflect your property’s market value until the Prop 13 value is reinstated.

• Comparable sales data from Tulare County is used by the Assessor to indicate real property value. The sales must be recorded no later than 90 days after January 1 according to the State Board of Equalization