Decline in Value Property Tax Appeal

Reduce Your California Property Taxes When Your Property Is Over-Assessed

If the market value of your California property has fallen below its assessed value, you may be paying more in property taxes than necessary. A Decline in Value Property Tax Appeal allows property owners to challenge an excessive assessment and potentially obtain a significant reduction in their annual property tax bill.

At Property Tax Associates, we specialize in representing commercial and residential property owners throughout California. We analyze your property’s current market value, prepare the supporting valuation evidence, file your property tax assessment appeal, and represent you throughout the appeal process.

Most importantly, there are no upfront fees or costs. We work on a contingency basis, which means we only receive a fee if we successfully reduce your property tax assessment.

What Is A Decline in Value Property Tax Appeal?

Under California Proposition 8, property owners are entitled to temporary property tax relief when the fair market value of their property falls below its current assessed value. For additional information, see the California Proposition 8 decline-in-value rules.

This commonly occurs because of declining real estate values, higher interest rates, increasing capitalization rates, reduced rental income, higher vacancies, changes in market conditions, or other economic factors.

A Prop 8 appeal allows a property owner to challenge the county’s assessed value and request that the property be temporarily reassessed at its lower market value.

For example, if your property is currently assessed at $8 million but its market value has declined to $6.5 million, a successful Proposition 8 property tax reduction could potentially lower the taxable value by $1.5 million.

Therefore, the resulting property tax savings can be substantial.

Is Your Property Over-Assessed?

The County Assessor determines your property’s taxable value each year. However, the assessor’s value does not always accurately reflect current market conditions.

This is particularly important for commercial real estate. Property values can change significantly because of higher interest rates, capitalization rate increases, declining rents, vacancies, concessions, operating expenses, tenant turnover, or changes in investor demand.

Consequently, even properties that have not experienced an obvious decline in income may still be over-assessed.

Our Decline in Value Property Tax Appeal begins with an analysis of your property’s assessed value compared with its estimated fair market value as of the applicable January 1 lien date.

If our analysis indicates that the property is over-assessed, we can pursue an appeal seeking a lower taxable value.

Commercial Decline in Value Property Tax Appeal

Commercial properties often require a more sophisticated valuation analysis than residential properties. Therefore, an effective commercial property tax appeal should consider not only comparable sales but also the property’s income-producing characteristics.

Depending on the property, our valuation analysis may include:

• Comparable property sales
• Market capitalization rates
• Rental rates and rent rolls
• Vacancy and collection loss
• Operating expenses
• Net operating income
• Income capitalization analysis
• Property-specific market conditions
• Recent changes in the local real estate market

In addition, we review the assessor’s valuation whenever possible to identify differences between the county’s assumptions and actual market conditions.

This comprehensive approach can provide stronger support for a lower assessed value.

Properties We Represent

Property Tax Associates handles a Decline in Value Property Tax Appeal for virtually all types of California real estate, including:

• Multifamily and apartment buildings
• Office buildings
• Retail and shopping centers
• Industrial and warehouse properties
• Hotels and hospitality properties
• Mixed-use properties
• Commercial land
• Single-family residential properties
• Special-purpose properties

Because every property is different, we tailor our valuation and appeal strategy to the specific property type and circumstances.

How Proposition 8 Decline in Value Property Tax Appeal Works

California’s Proposition 8 allows a property’s assessed value to be temporarily reduced when its market value on January 1 is lower than its taxable assessed value.

Unlike a permanent change to your Proposition 13 base-year value, a Proposition 8 property tax reduction is generally temporary. The assessor reviews the property’s value in subsequent years and may increase the assessment as the market recovers.

However, while the property qualifies for Proposition 8 treatment, its taxable value should generally reflect the lower of its factored base-year value or current fair market value.

As a result, filing a timely appeal can be important when you believe the assessor has valued your property above its actual market value.

Our Property Tax Appeal Process

1. Free Property Tax Analysis

First, we review your property’s current assessment and available market information to determine whether there appears to be an opportunity for a reduction.

2. File the Property Tax Assessment Appeal

If the property appears over-assessed and you decide to proceed, we prepare and file the necessary property tax assessment appeal with the appropriate county.

3. Prepare the Valuation

Next, we develop the valuation evidence supporting the requested reduction. Depending on the property, this may involve comparable sales, income capitalization, rental data, capitalization rates, vacancy rates, operating expenses, and other relevant market evidence.

4. Negotiate and Represent You at the Hearing

Whenever possible, we work with the county assessor to obtain an appropriate reduction. However, if an acceptable value cannot be reached, we are prepared to present the case before the Assessment Appeals Board. You can learn more about the California property tax assessment appeal process through the State Board of Equalization.

5. Obtain Your Property Tax Reduction

Finally, when the appeal is successful, the county adjusts the property’s assessed value. Depending on when the taxes were paid and the timing of the appeal, the reduction may result in a lower tax bill, a property tax refund, or both.

Why Property Owners File A Decline in Value Property Tax Appeal

Many property owners assume the assessor will automatically reduce their property’s value when the real estate market declines. Unfortunately, that does not always happen.

County assessors are responsible for valuing enormous numbers of properties. Therefore, assessments may rely on mass-appraisal techniques and market assumptions that do not fully reflect the circumstances of an individual property.

Moreover, commercial properties can be particularly difficult to value because changes in income, vacancy, expenses, capitalization rates, and financing conditions can have a significant effect on market value.

Filing a Decline in Value Property Tax Appeal gives property owners an opportunity to present property-specific evidence and challenge an assessment they believe exceeds fair market value.

Why Choose Property Tax Associates?

Property Tax Associates focuses on California property tax appeals and represents property owners throughout the appeal process.

Our experience includes thousands of property tax appeals involving billions of dollars in assessed real estate value.

When you work with us, we handle the process from beginning to end. This includes analyzing the property, preparing the appeal, developing the valuation evidence, communicating with the assessor, and representing you at the Assessment Appeals Board when necessary.

Furthermore, our contingency fee structure means there are no upfront fees or costs.

If we don’t reduce your assessment, you don’t pay us a fee.

How Much Could You Reduce Your Property Taxes in California?

The potential savings depend on the difference between your property’s current assessed value and its fair market value.

For example:

Current Assessed Value: $10,000,000
Estimated Market Value: $8,000,000
Potential Assessment Reduction: $2,000,000

At an approximate 1.2% property tax rate, a $2 million assessment reduction could produce approximately $24,000 in annual property tax savings.

Accordingly, even a relatively modest percentage reduction in the assessed value of a commercial property can produce meaningful tax savings.

If you are trying to reduce property taxes in California, the first step is determining whether your current assessment exceeds your property’s fair market value.

Don’t Pay Property Taxes on Value That Isn’t There

Real estate markets change. However, your property’s assessed value may not automatically reflect those changes.

If higher interest rates, declining rents, increased vacancies, higher capitalization rates, or changing market conditions have reduced your property’s value, you may have grounds for a Prop 8 appeal.

Property Tax Associates can evaluate your assessment and determine whether pursuing a reduction makes financial sense.

There is no upfront cost for our analysis, and there are no upfront fees to retain us for the appeal.

Request Your Free Property Tax Analysis

Find out whether your property may qualify for a reduction.

A Decline in Value Property Tax Appeal can potentially save property owners thousands—or even tens of thousands—of dollars in unnecessary property taxes.

Contact Property Tax Associates today for a free property tax analysis and evaluation.

No Upfront Fees • No Upfront Costs • We Only Get Paid If We Reduce Your Assessment

For A Free Market Analysis and Evaluation of your Property, Call (800) 252-3544 Or Click Below To Get Started