A decline in value occurs when your property's current market value drops below its Prop 13 assessed value (typically your purchase price plus up to 2% annual increases). When this happens, California allows you to request a reassessment to the lower market value.
This is the primary basis for California property tax appeals. Under Prop 13, you're normally protected from market increases—but you're also entitled to relief when markets decline.
If granted, your assessed value drops to current market value. It can increase again (up to 2% annually) as the market recovers, until it reaches your original Prop 13 base.
Decline in value appeals are the main tool for California property tax relief. While Prop 13 usually keeps assessments low, buyers during market peaks can end up with assessed values higher than their homes are currently worth.
You may have a decline in value if:
• You bought at a market peak and values dropped
• Your neighborhood experienced decline
• Your property has condition issues affecting value
• Comparable sales show lower prices than your basis
The filing window is July 2 through November 30. Don't wait—the county won't automatically reduce your value.
David bought a home in 2022 for $900,000. Under Prop 13:
2022 assessed value: $900,000
2023 assessed value: $918,000 (+2%)
2024 assessed value: $936,360 (+2%)
But the market declined. Comparable sales show his home is now worth $850,000.
David files an Assessment Appeal Application requesting a decline in value reduction. The Appeals Board agrees and sets his assessed value at $850,000.
Tax savings: ($936,360 - $850,000) × 1.1% = $950/year
Gather comparable sales showing similar properties selling for less than your assessed value. Recent sales within 6-12 months in your immediate area are most persuasive. Professional appraisals can also support your case.
Not necessarily. If market values recover, the assessor can increase your assessed value up to 2% per year until it returns to your original Prop 13 base. Your assessment follows the market down and gradually back up.
File between July 2 and November 30 for the current tax year. File as soon as you have evidence that market value is below assessed value—the sooner you get relief, the more you save.