In California, a home's assessed value is set by Proposition 13: its market value when it was bought or built, raised by no more than 2% a year. Market value is what it would sell for today. When prices rise faster than 2% a year, assessed value falls behind; when prices drop, the assessor can lower it.
Rules on this page come from the State Board of Equalization's Publication 29 (March 2025) and the Los Angeles County Assessor, checked on October 3, 2026. This is general information, not tax advice.
Which is usually higher, assessed value or market value?
For most long-time owners in California, market value is higher. The BOE notes that owners whose assessed values generally may not rise more than 2% a year tend to pay much less tax than recent buyers, whose assessed values are close to market value. Assessed value is higher only when today's market value has fallen below the factored base year value, and then the assessor enrolls the lower market value instead.
How California sets assessed value
- Base year value: the property's market value on the 1975 lien date, or on the date it was bought, newly built or changed ownership after that.
- Factored base year value: the base year value adjusted each year for inflation, by no more than 2%.
- Each January 1, the lien date, the assessor enrolls the lower of the factored base year value and the current market value.
- A change in ownership or completed new construction resets the base year value to market value, and a supplemental tax bill covers the rest of that fiscal year.
How property tax is figured from assessed value
The general tax rate is 1% of taxable value, plus rates for voter-approved debt, so the total rate differs by location. Exemptions reduce the value that is taxed; an owner who lives in the home claims the homeowners' exemption with form BOE-266.
Market value vs. appraised value
An appraisal is a professional opinion of market value on a specific date, usually ordered by a lender for a purchase or refinance. The assessor's value is for property tax and follows Prop 13's rules, so it can differ from both an appraisal and a recent sale price.
Why is my assessed value higher than my home's market value?
It happens after prices fall, when today's market value drops below your factored base year value. The assessor then enrolls the lower market value. In Los Angeles County, you can ask the Assessor for a decline-in-value review each year from July 2 to November 30; for the 2026-27 tax year, the deadline is November 30, 2026.
To keep your right to a formal appeal, file with the Los Angeles County Assessment Appeals Board in the same window, July 2 to November 30, for the regular roll, or within 60 days for a supplemental or escape bill. The informal review alone does not preserve that right.
| Option | Where | When |
|---|---|---|
| Decline-in-value review (informal) | Los Angeles County Assessor | July 2 to November 30 each year; 2026-27 deadline November 30, 2026 |
| Formal appeal, regular roll | Assessment Appeals Board | July 2 to November 30 |
| Formal appeal, supplemental or escape bill | Assessment Appeals Board | Within 60 days |
Related guides
Sources
Checked October 3, 2026
Last verified: October 3, 2026. General information only, not tax advice.
Frequently Asked Questions
Which is usually higher, assessed value or market value?+
Market value, for most owners who bought years ago: Prop 13 lets assessed value rise at most 2% a year, while market prices can rise faster. Assessed value is higher only after prices fall, and then the assessor can enroll the lower market value.
How close is assessed value to actual value?+
It depends on when the home was last bought or built. Assessed value starts at the market value then and can rise at most 2% a year, so the longer you own it in a rising market, the wider the gap.
Why is my assessed value higher than the appraised value?+
If market value has dropped below your factored base year value, the assessor should enroll the lower value. In Los Angeles County, request a decline-in-value review between July 2 and November 30, and file with the Assessment Appeals Board in the same window to keep your appeal rights.
Is California property tax based on market value or assessed value?+
On assessed (taxable) value under Prop 13: the general rate is 1% of taxable value plus voter-approved debt, applied after exemptions such as the homeowners' exemption.
When can I ask for a decline-in-value review in Los Angeles County?+
Each year from July 2 to November 30. For the 2026-27 tax year, the Assessor accepts applications from July 2, 2026, through November 30, 2026.
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