Could You Be Paying Less in Property Taxes?

Most Los Angeles homeowners don't realize they have a limited opportunity each year to ask the County Assessor to reduce the assessed value used to calculate their property taxes.

From July 2 through November 30, Los Angeles County accepts Decline-in-Value (Proposition 8) Review applications for homeowners who believe their property's market value as of January 1 is lower than its current assessed value.

Here's the part that surprises many homeowners: this does not change the value of your home.

It only changes the assessed value the County Assessor uses to calculate your property taxes. It is not an appraisal, it is not an indication of what your home would sell for, and it has no impact on your home's actual market value.

How Does It Work?

Under Proposition 13, your property's assessed value is generally based on your purchase price and can only increase by up to 2% per year unless there's a change in ownership or significant new construction.

However, under Proposition 8, if the market declines and your home is worth less than its current assessed value on January 1, you may qualify for a temporary reduction in your assessed value—and a lower property tax bill.

As the market recovers, the County can raise your assessed value again (up to the limits allowed by law), so this is not a permanent reduction.

A Few Common Misconceptions

One of the biggest myths I hear is that refinancing changes your property taxes. It doesn't. A refinance has no effect on your assessed value.

Your assessed value generally changes only when:

• You purchase the property.

• There is a change in ownership.

• You complete major new construction or improvements, such as adding square footage.

Simple remodeling, replacing finishes, or refinancing your mortgage typically does not trigger a reassessment.

Should You Apply?

If you purchased near the top of the market or believe your home's value on January 1 was below its current assessed value, it may be worth filing a Decline-in-Value Review. The application is free, and if approved, it could reduce your property tax bill for the year. Just remember—the filing window is July 2 through November 30, so don't miss it.

If you're unsure whether your property might qualify, I'd be happy to help you compare your current assessed value with today's market and determine whether filing a Decline-in-Value application makes sense.