Key Takeaways
- Proposition 8 (1978) requires assessors to reduce assessed value when market value drops below the Proposition 13 value
- Properties are assessed at the LESSER of: Proposition 13 factored value OR current market value
- Proposition 8 reductions are temporary—values can be restored to Proposition 13 level when market recovers
- There is no 2% limit on annual increases for Proposition 8 values—they can jump to market value
- Homeowners can apply for Proposition 8 review if they believe their property's market value has declined
Last updated: January 2026
Proposition 8: Decline in Value
Proposition 8, passed alongside Proposition 13 in 1978, provides property tax relief when market values decline below the Proposition 13 assessed value.
How Proposition 8 Works
The County Assessor must assess property at the lesser of:
| Value Type | Description |
|---|---|
| Proposition 13 value | Base year value plus 2% annual increases |
| Current market value | Actual market value as of January 1 |
When Market Value Drops
If market value falls below the Proposition 13 value:
- Assessor reduces assessment to market value
- Property owner pays taxes on lower value
- This is called a "Proposition 8 reduction" or "decline in value"
Example: Market Decline
| Year | Prop 13 Value | Market Value | Assessed Value |
|---|---|---|---|
| 2020 | $600,000 | $650,000 | $600,000 (Prop 13) |
| 2021 | $612,000 | $550,000 | $550,000 (Prop 8) |
| 2022 | $624,000 | $500,000 | $500,000 (Prop 8) |
| 2023 | $636,000 | $575,000 | $575,000 (Prop 8) |
| 2024 | $649,000 | $700,000 | $649,000 (Prop 13) |
Key Differences from Proposition 13
| Feature | Proposition 13 | Proposition 8 |
|---|---|---|
| Annual increase limit | Maximum 2% | No limit |
| Basis | Purchase price | Market value |
| Duration | Permanent | Temporary |
| Automatic? | Yes | Assessor reviews annually |
No 2% Limit on Proposition 8 Recovery
Unlike Proposition 13, there is no 2% limit on annual increases for Proposition 8 properties. When market value recovers:
- Assessment can increase to the full Proposition 13 value
- No gradual phase-in required
- Can result in large year-over-year tax increases
Requesting a Proposition 8 Review
Homeowners who believe their market value has declined can:
- File an informal review with the County Assessor
- File a formal assessment appeal with the Assessment Appeals Board
- Deadline: Usually by November 30 of the tax year
What to Provide
- Recent comparable sales
- Appraisal reports
- Evidence of property damage or obsolescence
- Market analysis showing decline
Assessment Date
Market value for Proposition 8 purposes is determined as of January 1 of each year. The Assessor reviews values annually.
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Test Your Knowledge
Under Proposition 8, property is assessed at:
A
B
C
D
Test Your Knowledge
When a property's market value recovers after a Proposition 8 reduction:
A
B
C
D