Now that we're experiencing declines in property values after the huge run-up in prices for the last few years, it's time to take a look at the procedures for disputing property tax assessments in the Los Angeles County area.

California's Proposition 8 is a constitutional amendment that allows a temporary reduction in assessed value when a property suffers a "decline-in-value". As defined by Proposition 8, "a decline-in-value occurs when the current market value of your property is less than the current assessed value as of January 1". This means that you have to look at the value of your home as of January 1, not today's value, in appealing your property tax bill.

Before You File An Appeal

It's best to call the Los Angeles County Assessor's Office prior to filing an appeal. If there is an error on your bill, they may be able to correct it over the phone. Sometimes assessments are added for additions or improvements to a property that were permitted but never completed, and these should be eliminated from your property tax bill without having to go through the formal appeals process.

The Property Tax Dispute Process

The property tax dispute process is actually quite easy!

• Complete a Decline in Value Reassessment Application form.
• Provide information on sales of comparable properties supporting your claim for a reduction in value. You can search the Los Angeles County Assessor's database for recently sold properties in your area here. A local real estate agent or title agent can also be a valuable source of information.
• You must select two comparable sales that sold as close to January 1 as possible, but no later than March 31 to enter onto the application form.
• File the form with the Assessor by December 31 of the current tax year.
• Be sure to pay your property taxes ON TIME, even if there is an appeal pending.

Using Comparable Sales to Prove Decline in Value

Finding comparable sales (comps) for your home is relatively easy if you're living in the Santa Clarita area, since most housing tracts are clearly defined. Here are a few guidelines to follow when looking at comparable sales:

• Be sure that all transactions used are "arm's length" transactions, meaning that the homes were sold on the open market. Don't use foreclosure sales or other distress sales for comps. And don't use sales where the home was sold to a family member.
• Make sure the homes used for comps are similar to yours, preferably the same model within your tract. If there has been limited activity in your area, expand your search to homes close to yours both geographically and in age, and that have similar square footage (lot size and living space) to yours. Also take views, pools and other improvements into consideration.
• You can use price per square foot as a measure of value, but realize that this is only a portion of the property's value. You must also take into consideration any simiilarities and differences between your home and any other home that you choose to use as a comparable sale.

Appealing the Assessor's Decision

After the Decline in Value Reassessment Application form is filed, it will be reviewed by the Los Angeles County Assessor's Office. If you don't agree with their decision, you can of course file an appeal with the Assessment Appeals Board. You must file your appeal between July 2 and November 30.

The Decline in Value Determination is Only Temporary!

Proposition 8 property tax reassessments are not permanent, but last at least one year. Reassessment values will continue to increase by an annual inflation factor of no more than 2% per year. Therefore, it may be necessary to file a request for reassessment in subsequent years as well.

What NOT to Expect

The property tax appeals board only has limited authority. They cannot reduce your property tax bill simply because your neighbors are paying less than you are. They cannot remove penalties or interest for paying your taxes late. They cannot extend property tax filing periods. And they cannot change the decision of another appeals board.

For more information on the California property tax appeals process, read Publication 30: California Residential Property Assessment Appeals.