Base Year Value Property Tax Information

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Proposition 13 converted the market value-based property tax system to an acquisition value-based system.

For real property assessed under Proposition 13, its fair market value as of either the 1975 lien date or the date the property was purchased, newly constructed, or underwent a change in ownership after the 1975 lien date.

Under Proposition 13, properties are reassessed to current market value only upon a change in ownership or completion of new construction (called the base year value). In addition, Proposition 13 generally limits annual increases in the base year value of real property to no more than 2 percent, except when property changes ownership or undergoes new construction.

Change of Ownership

Each county assessor’s office reviews all recorded deeds for that county to determine which properties require reappraisal under the law if ownership has changed hands.

The county assessors may also discover changes in ownership through other means, such as taxpayer self-reporting, field inspections, review of building permits and newspapers. Once the county assessor has determined that a change in ownership has occurred, Proposition 13 requires the county assessor to reassess the property to its current fair market value as of the date ownership changed.

Since property taxes are based on the assessed value of a property at the time of acquisition, a current market value that is higher than the previously assessed Proposition 13 adjusted base year value will increase the property taxes. Conversely, if the current market value is lower than the previously assessed Proposition 13 adjusted base year value, then the property taxes on that property will decrease.

Only that portion of the property that changes ownership, however, is subject to reappraisal. For example, if 50 percent of the property is transferred, the assessor will reassess only 50 percent of the property at its current fair market value as of the date of the transfer, and deduct 50 percent from any existing Proposition 13 base year value. In most cases, when a person buys a residence, the entire property undergoes a change in ownership and 100 percent of the property is reassessed to its current market value.

New Construction

New construction means:

  • Any addition to real property, whether land or improvements, since the last lien date.
  • Any alteration of land or improvements since the last lien date which constitutes a major rehabilitation or which converts the property to a different use.

Supplemental Assessment

A Supplemental Assessment is an assessment of the fair market value of property as of the date a change in ownership occurs or when new construction is completed. It establishes a new base year value for the property or the new construction.

The supplemental roll provides a mechanism for placing property subject to Proposition 13 reappraisals due to change in ownership or completed new construction into immediate effect.

Changes in ownership or completed new construction are referred to as ‘supplemental events’ and result in supplemental tax bills that are in addition to the annual property tax bill.

The increase (or decrease) in assessed value resulting from the reappraisal is reflected in a prorated assessment (a supplemental bill) that covers the period from the first day of the month following the supplemental event to the end of the fiscal year. A fiscal year runs from July 1 through June 30.

Supplemental assessments apply to real property (land, improvements, and fixtures and taxable possessory interests) but do not apply to personal property or any property not subject to Proposition 13.

Revenue and Taxation Code sections 75-75.72 detail the laws governing the supplemental assessment process.


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