Prop 13 vs. Prop 8: How Two California Property Tax Laws Actually Work Together
Most homeowners think they're alternatives. They're not. Prop 13 sets the ceiling. Prop 8 lets the assessor temporarily go below it.
Prop 13 is the rule that keeps your assessed value low for as long as you own the house. Prop 8 is the safety valve that kicks in temporarily when the market drops below that already-low number. They're not alternatives — they work together. On any given January 1, the assessor is required to enroll whichever value is lower.
If you've ever wondered why your neighbor pays $3,000 in property taxes and you pay $11,000 on the same-looking house, that's Prop 13. If you've ever heard someone say “I got my taxes lowered for a year because the market crashed,” that's Prop 8.
What's the difference between Prop 13 and Prop 8?
Prop 13 is a permanent cap on how fast your assessed value can grow — at most 2% a year, forever, until the property changes hands. Prop 8 is a temporary reduction the assessor enrolls when the market value of your home on January 1 has dropped below the Prop 13 number.
In California Revenue & Taxation Code § 51(a), the legislature spelled it out plainly: every January 1, the assessor enrolls “the lesser of” your factored base year value (Prop 13) or your full cash value (Prop 8). That one sentence is the whole framework.
What does Proposition 13 actually do?
Proposition 13, passed by California voters in June 1978, did three things — and you can find each of them in Article XIII A of the California Constitution.
The 1% rate cap
Your basic property tax rate is capped at 1% of assessed value, plus whatever local voter-approved bonds your area has on top. Most California homeowners end up paying somewhere between 1.05% and 1.25% all-in once those bonds are added.
The base-year value
Your base-year value is the value the assessor enrolls when you buy the house or finish new construction. That's the starting line. Article XIII A § 2(a) requires it to be the “full cash value” at the time of acquisition. If you bought in 2008 for $620,000, your base-year value is $620,000.
The 2% annual cap
Your base-year value, adjusted upward each year by an inflation factor that cannot exceed 2%, is your factored base year value (FBYV) — and that's the Prop 13 ceiling. The actual inflation factor each year is the change in the California Consumer Price Index from October to October, rounded to the nearest one-thousandth of one percent, capped at 2%. The State Board of Equalization publishes the rate every year in a Letter to Assessors. For most years, it has been the full 2%.
What does Proposition 8 actually do?
Proposition 8, also passed in November 1978, amended Prop 13 to require the assessor to temporarily lower your assessed value when the current market value of your home on January 1 has fallen below the Prop 13 ceiling.
Where it lives in the law
The constitutional authority is the same Article XIII A § 2(b) that contains the 2% cap — it specifies that the value can be “reduced to reflect substantial damage, destruction, or other factors causing a decline in value.” The procedure lives in Revenue & Taxation Code § 51(a)(2): the taxable value each year is the lower of the factored base year value or “full cash value as of the lien date, taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value.”
Why it's called “decline-in-value”
County assessors usually call this a decline-in-value reassessment rather than a “Prop 8 appeal,” because Prop 8 is the constitutional authority — the actual procedure is a value-based review under § 51. Some counties use both terms; Santa Clara, Alameda, and Orange County all call their request forms “Decline in Value” rather than “Prop 8.”
The procedure for getting a Prop 8 reduction is its own page.
Read the procedureWhen does each one apply?
Prop 13 applies every year, automatically
You don't have to file anything. The assessor sets your base-year value at purchase, then bumps it by up to 2% a year on every subsequent January 1 lien date. The “lien date” is the legal moment in time at which property values are fixed for the next year's tax bill — it's January 1 every year.
Prop 8 only applies when market value drops below your factored base year value
And only as of January 1. The assessor isn't allowed to consider how the market looked in March or July — only the lien date. If your house is worth $50,000 less in May but recovers by January 1, you don't qualify that year.
About 17,000 Santa Clara County properties received proactive Prop 8 reductions for the 2023-24 roll year, totaling roughly $4.7 billion in assessment-value reductions, after the office expanded its review program — a useful concrete illustration of how often this kicks in during a soft market.
Does a Prop 8 reduction reset my Prop 13 base year?
No — and this is the single most important thing to understand. A Prop 8 reduction does not touch your Prop 13 base-year value. Your factored base year value keeps growing in the background by the regular up-to-2%-a-year inflation factor, even while you're enjoying a temporarily lower assessed value.
Once the market recovers, the assessor will catch your assessed value back up to the factored base year value. After that, you're back on the Prop 13 track and the 2% cap protects you again.
If my house value goes back up, do my taxes jump?
Yes — and this catches a lot of people off guard. While your property is in Prop 8 status, the 2% cap doesn't apply. The assessor enrolls actual market value each January 1. So if your market value jumps from $720,000 to $810,000 in one year while you're under a Prop 8 reduction, your assessed value can rise that full $90,000 — a 12.5% increase — even though Prop 13 normally caps it at 2%.
The one rule the assessor still has to follow: your assessed value can never go above your factored base year value for that year. The Prop 13 ceiling still holds.
A worked example you can follow
Numbers below are illustrative — your actual factored base year value and tax rate are on your assessment notice. Calculations follow the formula in R&T § 51(a). You buy a home in 2018 for $700,000. That's your Prop 13 base-year value.
| Year | Market value on Jan 1 | FBYV (Prop 13, max +2%/yr) | Assessed value (the lower) | Why |
|---|---|---|---|---|
| 2018 | $700,000 | $700,000 | $700,000 | Year you bought |
| 2019 | $720,000 | $714,000 | $714,000 | Prop 13 number is lower |
| 2020 | $760,000 | $728,280 | $728,280 | Prop 13 still lower |
| 2021 | $710,000 | $742,846 | $710,000 | Prop 8 kicks in — market is lower than Prop 13 ceiling |
| 2022 | $695,000 | $757,703 | $695,000 | Still Prop 8 |
| 2023 | $740,000 | $772,857 | $740,000 | Still Prop 8 — assessed value jumps 6.5%, not just 2%, because Prop 8 governs |
| 2024 | $810,000 | $788,314 | $788,314 | Back on Prop 13 track — capped at the factored base year value |
In 2024, the market recovers strongly, but your assessed value can't go above the factored base year value of $788,314 even though the home is worth $810,000.
How do I know which one is on my bill right now?
Look at your county's annual notice of assessed value (mailed in June or July depending on the county) or your most recent property tax bill. Most counties show your factored base year value separately from your “current assessed value” or “Prop 8 value.” If the two numbers are different and the lower one is enrolled, you're in Prop 8 status. If they match, you're on the regular Prop 13 track.
You can also call your county assessor — every California county assessor's office is required to be able to tell you both numbers.
Frequently asked questions
Yes. Prop 8 is the constitutional authority (California Constitution, Article XIII A § 2(b)); R&T Code § 51 is the implementing statute the assessor follows. When a county assessor's website mentions a “Section 51 review” or a “Decline in Value review,” they’re talking about the same thing voters approved as Prop 8 in 1978.
Not automatically. R&T § 51 requires the assessor to review the property every January 1 for as long as a Prop 8 reduction is enrolled. If the market has recovered, your assessed value will rise toward (and eventually back to) the factored base year value. But the assessor cannot condition the review on you filing an appeal — once you’re in Prop 8 status, the annual look is required.
Two reasons. First, the cap is on assessed value, not on the actual dollar amount you owe — voter-approved local bonds (school bonds, parcel taxes, special assessments) are added on top of the 1% base rate. Second, if you previously had a Prop 8 reduction and the market is recovering, your assessed value can grow more than 2% in a single year until you’re back on your Prop 13 track.
Yes. The factor is the lesser of 2% or the actual change in the California CPI from October to October. In years of low inflation (2010 was 0.753%, for example), the factor was below 2%. The Board of Equalization publishes the official factor every year as a Letter to Assessors.
Prop 19 (passed November 2020) changed parent-child reassessment rules and base-year-value transfers for homeowners 55+, severely disabled, or wildfire/disaster victims. It did not change the basic mechanics of Prop 13 (the 2% cap) or Prop 8 (decline-in-value reductions). Those are still governed by Article XIII A § 2(a)–(b) and R&T § 51.
What to do next
If you think your assessor's value is higher than what your house would actually sell for on January 1, the next page to read is decline-in-value reassessment — it walks through the procedure for getting a Prop 8 reduction. If you already know you want to file, California property tax deadlines has the specific filing windows for your county. For the deeper Prop 8 explainer, see what is Proposition 8.
For an in-county example, how to appeal in Alameda County walks through one specific county's two-track process.
A note on who's behind this page: Overassessed is run by a homeowner advocate, not a CPA or attorney. Everything above is sourced to the California Constitution, the Revenue & Taxation Code, the State Board of Equalization, and county assessor publications. For your specific situation, a property tax attorney or CPA can give you advice we can't.
Want to know if Prop 8 might lower your assessment? Enter your address and we'll check in about 60 seconds.
Free. No signup required.
Overassessed provides estimates based on publicly available data and AI-generated analysis. This is not a formal appraisal, legal advice, or tax advice. Results are not guaranteed, and appeal outcomes depend on county review. Users file their own appeals. AI-generated estimates may differ from actual market values.