Proposition 8, passed in November 1978, amended Proposition 13 to recognize declines in value for property tax purposes. Proposition 8 decline in market value assessments, are temporary reductions that recognize the fact that the market value of a property as of the January 1 lien date has fallen below its Proposition 13 factored value.
The Revenue and Taxation Code authorizes the Assessor to annually enroll either the property’s Proposition 13 factored base year value, or its market value as of January 1, whichever is less.
Once a Proposition 8 reduced value has been enrolled, that property’s value must be reviewed each year as of the January 1 lien date, to determine whether its market value continues to be less than its Proposition 13 factored value. Proposition 8 values can change from year to year as the market fluctuates.
When the market value of the property increases above its Proposition 13 factored value, the Assessor will once again enroll its Proposition 13 factored value. In no case may a value higher than a property’s Proposition 13 factored value be enrolled.
Properties enrolled under Proposition 8 provisions are not subject to the 2% annual increase limitation that applies to those enrolled under Proposition 13 provisions.