California’s system of property taxation under Article XIIIA of the state Constitution, commonly referred to as Proposition 13, values property at its 1975 fair market value with annual increases limited to the inflation rate, as measured by the California Consumer Price Index, or 2%, whichever is less.
Subsequently, real property is reappraised for tax purposes only when:
- A change in ownership occurs
- New construction is completed
- New construction is unfinished on the lien date (January 1)
- Market value declines below Proposition 13 factored value on the lien date. (ref. Art XIIIA of the State Constitution, R&T 51)
If none of these things occurs, the assessed value of a property should increase by no more than 2% per year.
The law provides that the sales price of the property is presumed to be its market value unless the Assessor can demonstrate through market or other evidence that the sales price does not accurately reflect market value. The Assessor must also adjust the sales price of a property to reflect any value attributable to non cash items exchanged in a sale.
The assessed value initially established is referred to as the “base year value.” Thereafter the base year value is subject to annual increases for inflation. This cumulative value is referred to as the “factored base year value.”
The 2% limit does not apply to properties that are being assessed under Proposition 8 due to a decline in value. Properties reassessed as a result of a decline in value may increase or decrease by any percentage, but in no case may their assessed value exceed their Proposition 13 factored base year value.
The Assessor’s Role In Property Assessment
The Assessor’s office receives many calls from property owners asking about the value of their property for a variety of purposes; inheritance, estate planning, and insurancecoverage are just a few examples. For these types of questions we suggest that the property owners contact a licensed, private real estate appraiser, also know as a fee appraiser, to prepare an appraisal that meets the specific purpose. A list of fee appraisers can be obtained from an attorney, accountant, real estate professional, or in the telephone directory or Internet.
Under Proposition 13 the Assessor values property only when there is change in ownership, new construction, or a decline in value. If the property owner has a concern about a property tax value that the Assessor has enrolled, the owner is encouraged to contact the Assessor to discuss the matter and request a review of the assessment. The owner may also send us a private real estate appraisal that may have been done for other purposes. We will review the information provided to see if it is relevant to our property valuation.
Tax Rates And Direct Levies
Under Proposition 13, the property tax rate is fixed at 1% of assessed value plus any assessment bond approved by popular vote. As a result of various assessment bonds property tax rates in Sacramento County average roughly 1.1% countywide.
Annual tax bills may also include other items such as special assessments, special taxes, direct levies, delinquent county utility billings, weed and hazard abatement charges, and Mello-Roos Bonds. These items are commonly referred to as “direct levies”. None of these items are defined as property taxes under the law because they are not based upon the assessed value of the property. While the levying agencies’ revenues are collected via the County's property tax bills, the County itself has no control over these levies or the agencies issuing them. Disputes over the amounts of non-property tax levies must be resolved with the entity issuing the levy, not with the Assessor. To inquire about these special assessments contact the appropriate Direct Levy District. The telephone number is shown on your property tax bill next to each levy. The contact information may also be found on the County Department of Finance, Auditor-Controller'sweb page underDirect Levy District Listings(scroll down to Direct Levy District Listings and select by fiscal year).
I am a property taxation expert with a deep understanding of California's tax system, particularly Proposition 13, which governs property taxation under Article XIIIA of the state Constitution. My expertise is grounded in a thorough knowledge of the legal framework, practical implementation, and the implications for property owners.
In the context of Proposition 13, property is valued at its 1975 fair market value, with annual increases limited to the inflation rate or 2%, whichever is less. Reappraisal for tax purposes only occurs under specific conditions: a change in ownership, completion of new construction, unfinished new construction on the lien date (January 1), or a market value decline below the Proposition 13 factored value on the lien date. In the absence of these events, the assessed value of a property should increase by no more than 2% per year.
The law establishes that the sales price is presumed to be the market value unless the Assessor can demonstrate otherwise through market or other evidence. The Assessor is also required to adjust the sales price to reflect any value attributable to non-cash items exchanged in a sale. The assessed value initially set is known as the "base year value," subject to annual increases for inflation, resulting in the "factored base year value."
Notably, the 2% limit does not apply to properties assessed under Proposition 8 due to a decline in value. Such properties may experience increases or decreases without exceeding their Proposition 13 factored base year value.
The Assessor's role is crucial in property assessment, focusing on valuation only during specific events such as changes in ownership, new construction, or value decline. Property owners concerned about their tax value are encouraged to contact the Assessor for a review. The Assessor may consider private real estate appraisals submitted by property owners for other purposes.
Under Proposition 13, the property tax rate is fixed at 1% of assessed value, plus any approved assessment bond. The annual tax bill may also include direct levies like special assessments, special taxes, and other charges not based on the property's assessed value. Disputes over these non-property tax levies are directed to the entity issuing the levy, not the Assessor.
For more detailed information or assistance with property valuation concerns, property owners can contact the Assessor's office or consult licensed private real estate appraisers. My expertise in this field is built on a comprehensive understanding of these legal provisions and their practical implications for property taxation in California.
