California Prop 8 vs. Prop 13: How Temporary Property Tax Reductions Work
The one-minute version
Prop 13 gives you a base year value when you buy or build, then limits annual increases in that value to a maximum of 2%. Your tax bill is based on the factored base year value unless Prop 8 applies.
Prop 8 kicks in only when current market value on the January 1 lien date is lower than your factored base year value. Your assessment temporarily drops to market value for that year.
The reduction is not permanent. Each year your assessor rechecks market value. If the market rebounds, your assessed value can **increase by more than 2% until it reaches the Prop 13 factored base year value again.
Think of Prop 13 as the long-term speed limit, and Prop 8 as a temporary detour when a road closes.
Key terms that matter
| Term | Plain-English meaning | Why you care |
|---|---|---|
| Base Year Value | The assessed value set at change in ownership or when new construction is completed | It is the anchor for all future years |
| Factored Base Year Value | Base Year Value increased by CPI factor, capped at 2% per year | This is your normal assessed value under Prop 13 |
| Lien Date | January 1 of each year | Market value is measured as of this date for Prop 8 |
| Market Value | What a willing buyer would pay a willing seller on January 1 | If this is lower than your factored value, Prop 8 applies |
| Prop 8 Decline-in-Value | A temporary reduction of assessed value to market value | Can lower your tax bill for that year |
| Assessment Appeals Board | Independent county board that hears assessment disputes | Where you file a formal appeal if needed |
How a Prop 8 reduction is calculated
The assessor compares two numbers on January 1:
- Factored Base Year Value under Prop 13
- Market Value supported by sales and condition on or near January 1
Your assessed value for that tax year is the lower of the two. The next year, the process repeats.
Taxes are roughly 1% of assessed value statewide, plus any voter-approved levies that vary by neighborhood. To keep the math simple below, we show the 1% general levy only.
Concrete examples
Example A: Starter home, gentle dip
| Item | Amount |
|---|---|
| Factored Base Year Value | $800,000 |
| Market Value on Jan 1 | $720,000 |
| Assessed Value for the year | $720,000 (Prop 8 applies) |
| Approx. 1% tax at assessed value | $7,200 |
| Approx. tax without Prop 8 | $8,000 |
| Estimated savings | $800 |
Example B: Recent buyer who purchased near the peak
| Item | Amount |
|---|---|
| Purchase price two years ago (base year) | $1,050,000 |
| Current factored base year value | $1,071,000 (assume 2% total increase) |
| Market Value on Jan 1 | $930,000 |
| Assessed Value for the year | $930,000 |
| Approx. 1% tax with Prop 8 | $9,300 |
| Approx. 1% tax at factored value | $10,710 |
| Estimated savings | $1,410 |
Example C: Condo with major deferred maintenance
| Item | Amount |
|---|---|
| Factored Base Year Value | $620,000 |
| Market Value if fully repaired | $640,000 |
| Dollar impact of needed repairs on Jan 1 | $40,000 |
| As-is Market Value on Jan 1 | $600,000 |
| Assessed Value for the year | $600,000 |
| Approx. 1% tax at assessed value | $6,000 |
| Estimated savings versus $620,000 | $200 |
What happens next year?
If market value rises from $720,000 back toward $800,000, your assessed value can rise more than 2% until it returns to $800,000. Once it reaches the factored base year value again, the 2% cap resumes.
When you should consider a Prop 8 appeal
Use this quick decision grid:
| Situation | Likely Prop 8 Case? | What to gather |
|---|---|---|
| You bought recently and the market pulled back | Yes | Comparable sales near January 1 below your factored value |
| Unit needs significant repairs as of January 1 | Possibly | Repair estimates, photos, contractor bids, inspection reports |
| New construction finished mid-year | Maybe, depending on value trend | Sales of similar new builds, cost data, condition proof |
| Neighborhood hit by localized issues (noise, traffic, views blocked) | Maybe | Before-and-after photos, sales reflecting the external impact |
| You just think taxes are high | No | A feeling is not evidence. You must show market value below factored value |
The Prop 8 process in plain steps
Start by checking your factored base year value on your county's property detail page or tax bill. Then estimate the market value as of January 1 using closed sales of similar homes near that date.
If your county offers an informal review, consider starting there. Many assessors accept a Decline-in-Value request with your evidence, which can be a faster path to resolution. Choosing the right approach saves time; see our comparison of informal and formal appeals to understand which option fits your situation best.
When the informal review doesn't resolve the issue, file a formal appeal with the county Assessment Appeals Board. Present clear comps, adjustments, and photos to support your case. Once filed, attend the hearing or authorize an agent to represent you. Keep your presentation concise and focus on the January 1 value rather than general market trends. If you're new to the appeal process, check out our complete walkthrough for step-by-step guidance.
Every county offers at least one regular annual filing window, though exact dates and forms vary, so always follow your county's specific instructions.
Evidence that works
| Evidence type | Best practices |
|---|---|
| Comparable sales | Closed within a few months of January 1. Adjust for size, condition, lot, view, and upgrades. See our guide to comparable sales for detailed methodology. |
| Condition documentation | Photos dated near January 1. Third-party reports. Written repair bids. |
| Market analysis | A simple grid of comps with time and condition adjustments is more persuasive than a long narrative. |
| Rental data (for income property) | Current rent roll and a basic income approach can support market value. |
Common mistakes to avoid
- Avoid using list prices instead of closed sales.
- Do not rely on sales far from January 1 when better data exists.
- Never quote Zillow alone without support (read about why automated valuations fall short in our myths article).
- Avoid arguing you cannot afford taxes rather than proving market value.
- Never ignore condition documentation when repairs are obvious.
How Prop 8 interacts with Prop 13
| Topic | Prop 13 rule | Prop 8 rule |
|---|---|---|
| Annual increase limit | Max 2% on factored base year value | No 2% cap while recovering from a reduction |
| Permanence | Long-term framework | Year-by-year and temporary |
| Evidence focus | Not needed unless you appeal base year | Must show market value below factored value |
| Effect on base year | Base year remains intact | Does not reset base year |
DIY checklist
- Pull your factored base year value.
- Create a comp table with 3 to 6 sales near January 1.
- Adjust for square footage, bed/bath count, condition, and location.
- Add photos and any repair estimates.
- Write a one-page cover letter that states the requested value and why. Understanding what evidence assessors actually prioritize can help you focus your effort where it counts.
- Submit the county decline-in-value form or appeal application within the filing window.
- Calendar follow-ups and hearing dates.
Frequently asked questions
Does a Prop 8 reduction lower my base year value forever?
No. Your base year value under Prop 13 stays intact. Prop 8 is year-to-year.
Can my assessed value rise by more than 2% next year?
Yes. After a Prop 8 reduction, your value can rise faster than 2% until it meets the factored base year value. Then the 2% cap applies again.
Do I have to be an owner-occupant?
No. Prop 8 applies to all property types, including rentals and second homes.
What date matters most?
January 1. That is the lien date used to measure market value each year.
What if I remodeled?
New construction can change your factored base year value. You can still get a Prop 8 reduction if the combined as-of-January-1 market value is below the new factored base year value.
What if I recently bought the home?
Your purchase price is an indicator of market value if close to January 1. If prices fell after your purchase, you can still pursue a reduction.
Will the county punish me for appealing?
No. You have the right to request a decline-in-value and to appeal. Learn more about whether appeals can backfire and how to minimize risk.
Do I need an appraisal?
Not required in most cases. A solid set of nearby sales adjusted for differences is often enough. Many homeowners successfully appeal with well-researched comparable sales, as explained in our comparable sales article.
How much can I save?
Roughly 1% of every dollar your assessed value is reduced, plus any proportional savings on voter-approved rates in your area.
Is there a fee to file?
Some counties charge a modest filing fee for formal appeals. Many decline-in-value reviews are free. Check your county's instructions. There are several other common questions and misconceptions about appeals addressed in our appeal myths article.
What if a disaster damaged my home?
Disaster relief is a separate track. You may qualify for a temporary reduction and property tax deferral. You can still pursue a Prop 8 reduction if market value is lower.
Final thoughts
Prop 13 protects you over time. Prop 8 protects you when the market slumps. Use both smartly and you only pay what is fair, not what is guessed.
Appealing on your own is possible. Winning with confidence is better. AppealArc can pull the right January 1-centric comps, build a defensible adjustment model, package a county-ready evidence set, and track deadlines.
Rules are local. Always verify the current instructions with your county assessor and your county's official sites before filing.