2% or not 2%...That is the question

By Bob Werner

Article by Bob published in several newspapers dealing with Proposition 13 and how it affects values

If a property's taxable value increases more than 2% in a single year and there have been no changes, it is likely that the property has been assessed at less than its "Proposition 13" value the prior year. This could be because it has been valued under a Williamson Act contract or it has had its value previously reduced under the provisions of Proposition 8.

The Williamson Act allows owners of agricultural properties to receive a reduction in their taxes when they agree to limit the development and use of the properties under contract. This allows the County to preserve agricultural lands. Williamson act properties often fluctuate in value year to year. This is due to changes in the capitalization rate supplied and mandated by the State, as well as local factors. This year, because of a change in the capitalization rate, many Williamson Act values will be going up about 3%. Because of changes in local factors recognized by the Assessor's Office, some property owners might see increases greater or less than 3%. Others will actually see their assessed values go down because of these factors.
Proposition 8 was passed shortly after Proposition 13. It allows the Assessor's Office to reduce the assessed value of a property to its current market value when that value is lower than its "Proposition 13" value. When a property is being valued under Proposition 8, its assessed value can go up or down dramatically as its market value changes year to year. However, the assessed value can never be higher than its "Proposition 13" value. If the current market value of a property valued under Proposition 8 becomes higher than its "Proposition 13" value, the property is assessed at its "Proposition 13" value. Because we have seen a rising market in the Fresno area in recent months, the value of many properties valued under Proposition 8 has risen as well.
So, while Proposition 13 does typically limit increases in assessed values to 2%, there are times when values will rise more than that. Again, It is usually because the property has been assessed at a lower value than what it would have been under Proposition 13.

If you have reason to believe your assessed value is too high, ask yourself whether the assessed value is higher than what the property would likely sell for. If you think it is, check some listings in your neighborhood and see what people are asking for similar properties. Call the listing agents and find out what similar properties have sold for. If the assessed value still seems high, call the Assessor's Office and let them know. The appraiser will ask you why you think the assessed value is too high. Because you have taken the steps outlined above, you will be able to easily answer the appraiser's questions and give reasons for your concerns. This will enable the Assessor's Office to provide responsive and accurate service.

Bob Werner