Due to the declining housing market in Nevada County in the second half of 2022, over 5,300 properties or 8.7 percent of parcels, were proactively reviewed for a reduction in assessed value by the Assessor’s Office.
Their assessed value for the upcoming 2023-24 tax year will be reduced under the auspices of Proposition 8, as the market value is less than the factored base year value (also known as Proposition 13 value). This is a temporary reduction for this roll year.
The Assessor's Office will continue to annually review properties as of January 1 of each year, until the market value exceeds the Prop 13 value. Under Prop 8, subsequent increases in assessed value are not limited to 2 percent and are based on overall market trends within the county. When the market value of a property goes above the Prop 13 value, the Prop 13 value is restored. Find more information at https://www.nevadacountyca.gov/189/Property-Assessment-Basics or at https://www.boe.ca.gov/proptaxes/decline-in-value/.
Proposition 13: Base Year Value
Proposition 13, passed in 1978, establishes the base year value concept for property tax assessments. Under Proposition 13, assessments for the year 1975 to 1976 serve as the original base year values. Thereafter, a new base year value is established at market value whenever a property is purchased, newly constructed or changes ownership. The base year value may increase a maximum of 2 percent per year.
Proposition 8: Temporary Reduction in Value
Proposition 8, passed in November 1978, amended Proposition 13 to recognize declines in value for property tax purposes. Prop 8 decline in market value assessments are temporary reductions that recognize the fact that the market value of a property as of the January 1 lien date has fallen below its Proposition 13 factored value. The Revenue and Taxation Code authorizes the Assessor to annually enroll either the property’s Proposition 13 factored base year value or its market value as of January 1st, whichever is less. Once a Proposition 8 reduced value has been enrolled, that property’s value must be reviewed each year as of the January 1st lien date, to determine whether its market value continues to be less than its Proposition 13 factored value. Proposition 8 values can change from year to year as the market fluctuates. When the market value of the property increases above its Proposition 13 factored value, the Assessor will once again enroll its Proposition 13 factored value. In no case may a value higher than a property’s Proposition 13 factored value be enrolled. Properties enrolled under Proposition 8 provisions are not subject to the 2 percent annual increase limitation that applies to those enrolled under Proposition 13 provisions.
Potential Next Steps
If you have evidence that the full market value of your property on January 1, 2023 is less than your 2023-2024 assessed value, you may wish to complete a ‘Request for Informal Assessment Review’ form. This is a free service to the taxpayer. In order for the Assessor to complete an informal review of your property, please complete and return this form to the Assessor’s Office by December 15. Direct all inquiries regarding this form to the Assessor’s Office at (530) 265-1232.