Property Value Decrease is Reviewable
July 14, 2022
By Jeff Prang
Los Angeles County Assessor
There’s an important date that will allow property owners to file an application that may allow for a decrease in their property tax because of a decrease in value of the very same property.
The date is July 2nd and it’s for filing a Decline-in-Value Review. For those unaware of what a Decline-In-Value Review entails the following information should be helpful. Furthermore, the 2022 Decline-in-Value filing period is July 2, 2022 through November 30, 2022. Applications will be available beginning on July 2, 2022. For more information, visit: http://www.assessor.lacounty.gov/div
California’s Proposition 13 established the base year value for property tax assessment. It also caps the growth of a property’s assessed value at no more than two percent a year unless the market value of a property falls below the base year value.
In 1978, California voters passed Proposition 8, a constitutional amendment that allows a temporary reduction in assessed value when a property suffers a “decline-in-value.” A decline-in-value occurs when the current market value of a property is less than the current assessed value as of January 1.
This office of the Assessor mailed over 59,000 Decline-in-Value review notifications to property owners with existing reductions in 2021. Additionally, over 1,400 Decline-in-Value review notifications were sent to commercial property owners. These commercial properties, likely impacted by the COVID-19 pandemic, were reviewed proactively by the Assessor for possible reductions in assessed value for 2021.
You must file a Decline-in-Value Review Application form (RP-87) with the Assessor between July 2 and November 30 for the fiscal year beginning on July 1. Applications are valid if postmarked by November 30. If November 30 falls on a Saturday, Sunday, or a legal holiday, an application is valid if either filed or postmarked by the next business day.
You must demonstrate that on January 1, the market value of your property was less than its current assessed value.
On your claim form, provide the Assessor with information that supports your opinion that the market value for your property is less than the assessed value. The best supporting documentation is information on sales of comparable properties. You should select two comparable sales that sold as close to January 1 as possible, but no later than March 31. You may query the Assessor’s database for sales in your neighborhood by visiting the Property Assessment Information System. While the submission of comparable sales is helpful for the Assessor in determining the market value of your property, applications submitted without comparable sales will be accepted and processed.
If the market value as of January 1 is less than the trended base value, your assessed value will be lowered to the market value for the fiscal year beginning on July 1. The adjusted value will be reflected on your annual tax bill.
If the current market value is higher than the trended base value, no change in assessed value will be made. Property owners are encouraged to review the Assessor’s website, assessor.lacounty.gov/div, for more information about Decline-in-Value and how property value is assessed.