Why LA County Taxable Values Can Sit Below Market—and When Owners Can Seek Relief

LOS ANGELES COUNTY — As October property tax bills approach, many homeowners across Los Angeles County are asking a familiar question: Why can a tax assessment sit far below what a home would sell for, and when can that bill be reduced?

The distinction matters because property taxes support schools, public safety and local services, while the gap between taxable and market value can shape household budgets. For longtime owners, Proposition 13 often keeps bills relatively stable. For buyers, heirs and disaster survivors, it can create confusion when values or ownership records change.

The issue is especially relevant in Pasadena and Altadena, where some homeowners may still pay taxes based on long-held Proposition 13 values, while others could qualify for temporary relief if their home’s market value has dropped.

The Los Angeles County Assessor’s Office explained in its September newsletter that, because of Proposition 13, a home’s taxable value often does not match what it could fetch in a sale.

Assessments generally follow the lower of two figures. One is the property’s Jan. 1 market value. The other is its factored base-year value, which is usually set when the property changes hands and can rise by no more than 2% a year. That explains why a house owned for many years may be assessed far below an estimated sale price.

Big swings in assessed value usually happen only with a new owner, new building work, or a temporary Proposition 8 decline-in-value adjustment. That adjustment lowers an assessment when a home’s Jan. 1 market value slips below its base-year value. The assessment can climb back as prices rebound, though never past the base-year amount.

Homeowners who think their home was worth less on Jan. 1 than its base-year value can ask for a decline-in-value review. The request goes on Form RP-87, which owners can file online on the assessor’s website between July 2 and Nov. 30 each year.

The office said a drop in value alone is not enough. Any reduction is temporary and gets reviewed each year, and neither lost equity nor a price below what the owner paid qualifies on its own. What matters is whether the home’s market value on Jan. 1 fell below its Proposition 13 value.

The newsletter used wildfire recovery as an example, pointing to inherited homes whose title and assessor records were never updated. In some cases, those outdated records made it hard to pinpoint who owned a home and who qualified for certain disaster relief.

Assessor Jeff Prang made a similar point to Pasadena officials after the Eaton Fire. His office wrote that accurate property records matter.

Keeping deeds and ownership records up to date could prevent complications during emergencies. Homeowners may be able to reduce a tax bill by filing Form RP-87 before Nov. 30 if their property’s Proposition 13 value is still higher than what it was Jan. 1.

Property taxes are not the only household expense worth a second look. Palmetto is running an exclusive offer for Southern California residents that the company says can save customers an average of 40% on electric bills with $0 down, which can add up to thousands of dollars a year. The special offer gives eligible homeowners a way to cut another major household expense with $0 down.

Housing costs and property taxes are making headlines elsewhere, too.

• In Palo Alto, assessed property values are rising as homeowners file more appeals.
• In Jackson County, Missouri, tax credits for homeowners followed widespread complaints about overpaid assessments.
• Across the U.S., rising home insurance costs are pushing property values lower in exposed areas.
• In Redwood City, California, rent cap and tenant protections advanced to voters.
• Nationwide, tax incentives for home renovations are driving interest in solar upgrades.

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