What is a Proposition 8 decline-in-value review in California?

Proposition 8 (1978) added Cal. Rev. & Tax. Code §51, which requires the assessor to enroll the lesser of (a) your property's factored base year value — the Prop 13 base value adjusted by up to 2% per year — or (b) its current market (full cash) value as of the January 1 lien date. When the market value falls below the factored base year value, you are entitled to a temporary reduction known as a Prop 8 decline-in-value assessment, explained on the state BOE decline-in-value page.

Many county assessors run an informal decline-in-value review on request — and some review properties automatically after a market drop — without requiring you to file a formal appeal. You typically submit two or three comparable sales near the January 1 lien date showing your home's market value is below the factored base year value. If the assessor agrees, the roll is lowered for that year.

Two things to know:

• Prop 8 reductions are temporary. The assessor can restore value year to year (up to the factored base year value) as the market recovers — increases are not capped at 2% while the property is in Prop 8 status, only at the factored base year ceiling.
• Informal review does not extend the appeal deadline. If the assessor declines or the lien date passes, you must still file a BOE-305-AH by your county's §1603 deadline to protect a formal appeal.

Prop 8 is the most common path for recently-purchased homes whose market value has slipped below the purchase-price-based base year value.