Decline-In-Value Tax Relief

 
Tax Relief in Rough Times 
 
We understand that residential property values and businesses may be adversely affected by COVID-19. For property tax purposes, the 2020 annual bill going out in October is based on the assessed value as of January 1, 2020, also known as the lien date.

Property taxes are based on the value of your property, so it is only fair that if a property loses value you shouldn’t have to pay taxes on the value that no longer exists. 

The assessed (taxable) value of a property is enrolled as the fair market value at time of purchase, plus a maximum inflation adjustment of 2 percent a year.  This means that over time the assessed value will likely be substantially lower than the market value if that property sold today.  If property loses value, but that market value is still higher than the assessed value, then there is no change because you were not paying taxes on any value above the assessed value to begin with. 

Tax relief becomes available if the market value dips below the assessed value - that is, if the property sold today it would be worth less than what it is being taxed at. This is called a Decline-In-Value (DIV). If you think this is the case for your property, you can apply for a DIV review. 

If granted, a DIV temporarily reduces the assessed value of a property to account for value loss, until such time as the value is restored. A property granted a DIV is reviewed by the Assessor’s Office each year, and any partially recovered value is restored. 
A common myth is the Decline-In-Value voids Proposition 13 base year protections. This is false. When value is restored it will not exceed your original trended base value. However, this accounts for the 2 percent inflation adjustments that would have occurred during the period in which the DIV was applied. 

Filing for the 2020 Decline-In-Value Reviews begin July 2, 2020 and end November 30, 2020. However, because property taxes are based on the Jan 1 lien date, DIV based on the impact of COVID-19 may not be available in 2020. Should a decline not be granted for 2020, the Assessor’s Office will review for a 2021 decline-in-value.

Please contact the Assessor’s Office for additional information on the decline-in-value process. We can be reached at (213) 974-3211 or at helpdesk@assessor.lacounty.gov, or visit https://assessor.lacounty.gov/wp-content/uploads/2015/02/E-23.pdf.