Assessed value in California is based on the lower of two values: the Proposition 13 value or the market value as of January 1st. The Proposition 13 value is based on the market value of property when it was acquired, plus new construction (if applicable), and adjusted for inflation by no more than 2% per year. By using the lower of these two values, property owners are provided tax relief during times of increasing and decreasing property values.

Since 2007, the Assessor has reviewed properties to recognize annual declines in property values throughout the county. By 2012, over 50% of residential and commercial property owners had seen temporary reductions in their assessed values. However, the condition of the economy is improving. For 2014, there are 43,637 assessments still assessed at market value. Due to the local real estate market recovery, 32,683 of these assessments will see increases in assessed value. These properties will be annually reviewed until their market value is higher than their Proposition 13 value. An additional 19,388 properties have recovered sufficient value so that their market value is higher than their Proposition 13 value, and they have been restored back up to their Proposition 13 base for 2014. “The increases in value continue for a second year to be primarily focused on residential properties where the strongest real estate market recovery has taken place,” says Assessor Kristen Spears.

If an assessment value has been temporarily reduced to its market value, the value may increase more than 2%. Just as there is no limit to the amount of the property tax reduction recognized in a given year during a market decline, there is also no limit on the amount of increase up to the Proposition 13 value when experiencing a market recovery. The percentage is dependent on the changes in the real estate market that occur from year to year. These annual adjustments will continue until the property’s market value exceeds the Proposition 13 value. When this occurs, the Proposition 13 value will be restored, and the assessed value increases will be limited to no more than or up to 2% per year. The diagram below provides further explanation on how market recovery and declines may affect assessed value.

Throughout this month, property owners will be mailed notices of their assessed value. “The Assessor’s Office is committed to proactive communication and delivery of excellent service to the public. We have provided additional information explaining the basis of these value changes in property owners’ value notices, enhanced the Assessor website, and stand ready to answer phone or lobby calls from property owners,” says Assessor Kristen Spears. If a property owner believes the market value on January 1, 2014, is less than the amount shown on the July 2014 value notice, the owner may request an assessment review. Property tax reviews are conducted at no cost to the property owners and may be initiated by filling out Value Review forms available on the Assessor’s website. Property owners may also contact the Assessor’s Office at (530) 889-4300, via email, or in person at 2980 Richardson Drive in Auburn.

Kristen Spears
Placer County Assessor

Press Release (PDF)