What is a factored base year value in California?

California assesses property under Proposition 13 rather than annual market value. When you buy a home or complete new construction, the assessor sets a base year value — generally the purchase price or cost of construction. Each year after, that figure is multiplied by an inflation factor (the California Consumer Price Index change), but the factor is capped at 2% per year. The result is your factored base year value (FBYV).

The factored base year value matters for appeals because of the lesser-of rule in Cal. Rev. & Tax. Code §51: the taxable value enrolled each year is the lesser of (a) the factored base year value or (b) the property's current market (full cash) value on the January 1 lien date. The state BOE decline-in-value page confirms the assessor enrolls the lower of those two numbers.

Why this drives strategy:

• If market value is above the FBYV, you are already protected by Prop 13 — there is usually nothing to appeal, because you are taxed on the lower factored base year value.
• If market value has fallen below the FBYV, you are entitled to a temporary Proposition 8 reduction down to market value. This is the most common residential appeal in California.
• The FBYV is the ceiling. An appeal cannot lower your assessment permanently below the base year value, and a Prop 8 reduction can be restored toward the FBYV (faster than 2%/year) as the market recovers.

A new base year value is only triggered by a change in ownership or new construction under Cal. Rev. & Tax. Code §60 — which is why recent buyers are most likely to have a FBYV near current market and thus a viable Prop 8 case.