California’s system of property taxation under Article XIIIA of the state Constitution, commonly referred to as Proposition 13, values property at its 1975 fair market value with annual increases limited to the inflation rate, as measured by the California Consumer Price Index, or 2%, whichever is less.
Subsequently, real property is reappraised for tax purposes only when:
- A change in ownership occurs
- New construction is completed
- New construction is unfinished on the lien date (January 1)
- Market value declines below Proposition 13 factored value on the lien date. (ref. Art XIIIA of the State Constitution, R&T 51)
If none of these things occurs, the assessed value of a property should increase by no more than 2% per year.
The law provides that the sales price of the property is presumed to be its market value unless the Assessor can demonstrate through market or other evidence that the sales price does not accurately reflect market value. The Assessor must also adjust the sales price of a property to reflect any value attributable to non cash items exchanged in a sale.
The assessed value initially established is referred to as the “base year value.” Thereafter the base year value is subject to annual increases for inflation. This cumulative value is referred to as the “factored base year value.”
The 2% limit does not apply to properties that are being assessed under Proposition 8 due to a decline in value. Properties reassessed as a result of a decline in value may increase or decrease by any percentage, but in no case may their assessed value exceed their Proposition 13 factored base year value.
The Assessor’s Role In Property Assessment
The Assessor’s office receives many calls from property owners asking about the value of their property for a variety of purposes; inheritance, estate planning, and insurance coverage are just a few examples. For these types of questions we suggest that the property owners contact a licensed, private real estate appraiser, also know as a fee appraiser, to prepare an appraisal that meets the specific purpose. A list of fee appraisers can be obtained from an attorney, accountant, real estate professional, or in the telephone directory or Internet.
Under Proposition 13 the Assessor values property only when there is change in ownership, new construction, or a decline in value. If the property owner has a concern about a property tax value that the Assessor has enrolled, the owner is encouraged to contact the Assessor to discuss the matter and request a review of the assessment. The owner may also send us a private real estate appraisal that may have been done for other purposes. We will review the information provided to see if it is relevant to our property valuation.
Tax Rates And Direct Levies
Under Proposition 13, the property tax rate is fixed at 1% of assessed value plus any assessment bond approved by popular vote. As a result of various assessment bonds property tax rates in Sacramento County average roughly 1.1% countywide.
Annual tax bills may also include other items such as special assessments, special taxes, direct levies, delinquent county utility billings, weed and hazard abatement charges, and Mello-Roos Bonds. These items are commonly referred to as “direct levies”. None of these items are defined as property taxes under the law because they are not based upon the assessed value of the property. While the levying agencies’ revenues are collected via the County's property tax bills, the County itself has no control over these levies or the agencies issuing them. Disputes over the amounts of non-property tax levies must be resolved with the entity issuing the levy, not with the Assessor. To inquire about these special assessments contact the appropriate Direct Levy District. The telephone number is shown on your property tax bill next to each levy. The contact information may also be found on the County Department of Finance, Auditor-Controller's web page under Direct Levy District Listings (scroll down to Direct Levy District Listings and select by fiscal year).