Base year value is the assessed value established when you purchased your California property or when new construction was completed. Under Prop 13, this becomes your baseline for property taxes, increasing by a maximum of 2% per year.
For most homeowners, base year value equals the purchase price. This is why two identical homes can have dramatically different tax bills—a home bought in 1990 has a much lower base than one bought in 2023.
Your base year value only resets upon a change in ownership or new construction, not based on market fluctuations.
Understanding your base year value is crucial for California property taxes. It's the anchor point for everything—your annual increases, your appeal rights, and your tax planning.
Key points about base year value:
• Set at purchase or completion of new construction
• Increases max 2% per year regardless of market
• Can be reduced temporarily for market declines
• Transfers between spouses and (with limits) to children
• Resets fully upon sale to non-exempt buyer
If you recently bought at a peak and markets declined, your current market value may be below your base. That's when a decline in value appeal makes sense.
Two neighbors in the same Los Angeles subdivision:
Home A (bought 1995):
• Original purchase price: $250,000
• Base year value (1995): $250,000
• Current assessed value (after 2%/year increases): ~$445,000
• Current annual taxes: ~$4,450
Home B (bought 2023):
• Purchase price: $1,200,000
• Base year value (2023): $1,200,000
• Current assessed value: ~$1,224,000
• Current annual taxes: ~$12,240
Same house. The 2023 buyer pays nearly 3x more in property taxes.
Your base year value itself doesn't decrease, but your assessed value can be temporarily reduced below base if market value declines. Once markets recover, your assessment can increase back up to the base (plus 2%/year growth).
Change in ownership (sale, inheritance outside exemptions, etc.) or new construction. Routine maintenance and repairs don't trigger reassessment, but major renovations adding square footage or value typically do.
California Proposition 19 (2020) allows homeowners 55+ or those affected by disaster to transfer their base year value to a replacement home, with conditions. Rules vary—consult a tax professional for your specific situation.