The decline in your Santa Clara County home value may lower your property taxes.
Proposition 8 was passed in 1978 by California voters. When a property experiences a decline in value proposition 8 allows for a temporary reduction in assessed value. A decline in value is determined if the market value of the property as of the lien date (January 1) is lower than the current assessed value.
The tax rate is applied against the current assessed value of your property. The amount of property taxes you pay is based upon the assessed value. Naturally an increase or decrease in the assessed value of your Santa Clara County home will impact the amount of property taxes you pay.
Santa Clara County home owners receive notice of the current assessed value of their home from the Assessor’s Office in May. This notice provides Santa Clara County home owners the opportunity to review the assessed value of their Santa Clara County home before it is officially enrolled on July 1.
How Prop 8 works.
If as of the lien date (January 1) the value of your Santa Clara County home is lower than the factored Prop 13 value, then the assessed value will be lowered to the market value. The Prop 13 value is typically the purchase price factored by 2% each year.
The annual tax bill is mailed by the Tax Collector in September. The adjusted value will be reflected on that year’s annual tax bill.
It’s important to note that a Prop 8 reduction does not change your base year value. A Prop 8 reduction is a temporary reduction.
Prop 8 reduction lower property tax.
After a Prop 8 reduction is granted, the property’s assessment will be reviewed annually. Once the Prop 13 value no longer exceeds its market value, the Prop 13 value, also known as the factored base year value, will be reinstated as the upper limit of the assessed value.
Prop 8 assessments are not restricted by the 2% maximum annual increase like Prop 13. Santa Clara County home values under Prop 8 assessment may be raised or lowered by any percentage each January 1. Santa Clara County homes under Prop 8 review may not be assessed at a greater value than the Prop 13 factored base year value.
The Prop 8 Process
• Complete the Prop 8 Decline-in-Value request form.
• Provide information to the Assessor that supports your opinion that the market value of your Santa Clara County home is less than the assessed value. Information on sales of comparable Santa Clara County properties is the best documentation to provide to the Assessor regarding the market value of your Santa Clara County home. Comparable sales should include Santa Clara County homes sold as close to January 1 as possible and homes sold no later than March 31.
• Prop 8 Decline-in-Value Request Forms received by the Assessor’s Office after September 15 will be considered in the requests for the subsequent January 1st lien date.
• An appraiser will review your request. Typically Santa Clara County homeowners will be notified of the Prop 8 review within 30 days of the request date.
• The review process for multi-family, commercial and industrial property Prop 8 reviews typically take longer than 30 days simply because more information such as rent rolls, income and expense statements, leases and other documents must be reviewed as well.
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