California Base Year Value Under Proposition 13: Resets, Transfers, and Appeals

The California base year value under Proposition 13 is the assessed value placed on your property when you bought it or when a qualifying change in ownership was recorded, and it is the number your property tax bill is built on. Proposition 13, approved by voters in 1978, caps the base property tax rate at 1% of that assessed value and limits annual increases in the value itself to 2% or the rate of inflation, whichever is lower. Once set, your base year value stays in place — adjusted upward each year by that small inflation factor — until a sale, new construction, or other triggering event forces a reassessment.

How Your Base Year Value Is Set

Your base year value equals the fair market value of your property on the date you purchased it or on the date a change in ownership was recorded. Revenue and Taxation Code Section 110.1 defines this as the property’s “full cash value” at that moment, and in a standard sale the purchase price on the deed serves as that value.¹ If the assessor concludes the recorded price doesn’t reflect a genuine market transaction, the county will look at comparable recent sales nearby to set the value instead.

Properties that haven’t changed hands since Proposition 13 took effect carry a base year value set from the 1975-76 tax roll.² That 1975 value, adjusted by up to 2% each year since, still forms the taxable assessment for those properties today. It’s why some longtime owners pay strikingly low property taxes relative to what their homes would sell for now.

The 1% Rate and the 2% Annual Cap

Proposition 13 caps the base property tax rate at 1% of a property’s assessed value, plus any voter-approved local bond rates layered on top.³ Your annual tax bill starts at roughly 1% of your base year value and grows slowly as that value is adjusted upward for inflation each year.

Article XIIIA, Section 2 of the California Constitution limits those annual increases to 2% or the actual rate of inflation, whichever is lower.⁴ The inflation measure is the California Consumer Price Index for all items, calculated by the Department of Industrial Relations based on the change from October to October.⁵ If inflation runs at 1.5% in a given year, that’s the adjustment, not 2%. For the 2025–26 assessment year, the adjustment hit the full 2% ceiling.⁶

The adjusted figure is called the factored base year value. That is what you actually pay tax on each year, and in most cases it falls far below current market value for anyone who has owned the property for more than a few years.

Events That Reset Your Base Year Value

Your factored base year value stays in place until a triggering event forces a reassessment at current market levels. The three main triggers are sales, new construction, and changes in control of legal entities that own real property.

Sales and Ownership Changes

The most common trigger is a change in ownership, defined as any transfer of a present interest in property where the value transferred is substantially equal to the full ownership interest.² An arm’s-length sale resets the base year value to the current purchase price. The seller’s decades of capped 2% increases disappear, and the buyer starts fresh at the new, higher number.

New Construction

Adding square footage, building an accessory dwelling unit, or converting a garage into living space all qualify as new construction that triggers a partial reassessment.⁷ The assessor determines the market value of the new work and adds that amount to your existing base year value. The original structure keeps its historical assessed value; only the new improvements get a fresh base year value.

Routine maintenance and cosmetic repairs don’t trigger reassessment. The line is drawn at work that either converts the property to a substantially new condition or changes its use. Replacing a worn-out roof with equivalent materials is maintenance; adding a second story is new construction. If a disaster damages your property and you rebuild to substantially the same condition, the reconstruction does not count as new construction, and your base year value survives intact.⁷

Legal Entity Transfers

Property held inside an LLC, corporation, or partnership can be reassessed without anyone selling the building. When someone acquires more than 50% of the ownership interests in the entity, all California real property owned by that entity is subject to reassessment.⁸

The same rule applies when the original co-owners of the entity gradually sell off their interests over time. Once more than 50% of the original ownership interests have been transferred, even across multiple transactions spanning many years, the property is reassessed. These transfers must be reported to the Board of Equalization on Form BOE-100-B within 90 days.⁸ The reassessment can come as a surprise years after the original co-owners started selling off pieces.

Transfers That Skip Reassessment

Several types of ownership changes are specifically excluded from reassessment. Transfers between spouses are the most common. Any transfer between married spouses, whether into a trust for a spouse’s benefit, at death, or as part of a divorce settlement, does not reset the base year value.⁹ Registered domestic partners receive the same protection.

Transfers into and out of revocable living trusts also avoid reassessment, as long as the person who created the trust remains a beneficiary. The key is that the transfer doesn’t shift actual beneficial ownership to someone new. When it does, it’s treated like any other change in ownership.

Parent-Child Transfers Under Proposition 19

Proposition 19 significantly narrowed the parent-child transfer exclusion. Today, the only properties that qualify are a family home that was the parent’s primary residence and will become the child’s primary residence, or a family farm. Rental properties, vacation homes, and investment real estate no longer qualify for any exclusion.¹⁰

Even for qualifying properties, there’s a value limit. The exclusion covers the property’s factored base year value plus $1,044,586, the current figure for transfers occurring between February 16, 2025, and February 15, 2027, with the amount adjusted every two years.¹¹ If the property’s fair market value exceeds the factored base year value plus that amount, the excess is added to the transferred assessed value.

The child receiving the property must file for either the homeowners’ exemption or the disabled veterans’ exemption within one year of the transfer. The exclusion claim, Form BOE-19-P for parent-child transfers or BOE-19-G for grandparent-grandchild transfers, must be filed with the county assessor within three years of the transfer date or before the property is sold to someone else, whichever comes first.¹⁰ Grandparent-to-grandchild transfers only qualify when the grandchild’s parents are deceased.¹¹

Taking Your Base Year Value With You

Proposition 19, which took effect in April 2021, allows qualifying homeowners to transfer their existing base year value to a replacement home anywhere in California. To qualify, you must be at least 55 years old, severely and permanently disabled, or a victim of a wildfire or natural disaster. Both the home you sell and the home you buy must be your primary residence, and you must purchase or build the replacement within two years of selling the original.¹⁰

Homeowners who qualify based on age or disability can use this benefit up to three times in their lifetime.¹² Disaster victims face no such limit.

You can transfer your base year value even if the replacement home costs more than the one you sold, but the excess value gets added to your transferred assessment. If you buy within the first year after selling, replacement values up to 105% of the original home’s market value carry no adjustment. In the second year, that cushion rises to 110%. Suppose your original home had a factored base year value of $300,000 and a market value of $600,000, and you buy a replacement for $700,000. The $100,000 difference between the two market values is added to your transferred base year value, giving you a new taxable value of $400,000 on a $700,000 home.¹³

The claim form depends on which category you fall into: BOE-19-B for age 55 or older, BOE-19-D (with the BOE-19-DC disability certificate) for severe disability, and BOE-19-V for wildfire or disaster victims. File with the county assessor where the replacement property sits.¹⁰

When Market Declines Lower Your Assessment

The base year value isn’t a one-way ratchet. Under Proposition 8, a 1978 companion measure, if your property’s current market value drops below its factored base year value as of the January 1 lien date, the assessor must reduce your assessment to the lower market value.¹⁴

This reduction is temporary. Once the market recovers, the assessor will raise your assessed value, and these recovery increases are not subject to the usual 2% annual cap. Your assessed value can jump by more than 2% in a single year as it climbs back toward the factored base year value. The ceiling is firm, though: your assessed value can never be raised above the factored base year value unless a new change in ownership or new construction occurs.¹⁴

The assessor reviews properties in decline-in-value status annually without any action required from you. If you believe your property qualifies and the assessor hasn’t applied a reduction, you can file an assessment appeal.

Supplemental Tax Bills After You Buy

New owners are often caught off guard by a supplemental tax bill a few months after closing. It is separate from the regular annual property tax bill and covers the difference between the previous owner’s lower assessed value and the new base year value for the remainder of the fiscal year.¹⁵

The county assessor calculates this bill by subtracting the old assessed value from the new one, multiplying the net amount by the tax rate, and then prorating based on how many months remain in the fiscal year (July 1 through June 30). A purchase that closes in October carries a proration factor of 0.75; a March close drops to 0.33.¹⁵

Timing also determines how many supplemental bills you receive. Buy between June and December, and you’ll get one. Buy between January and May, and you’ll get two: one covering the remainder of the current fiscal year and another for the following full fiscal year starting July 1.¹⁵ These bills arrive separately from the regular tax bill, and failing to pay them triggers the same penalties and interest as any other delinquent property tax.

Contesting Your Base Year Value

If you believe your new base year value is too high, you can appeal. The process starts by filing an Assessment Appeal Application (Form BOE-305-AH) with the clerk of the board in the county where the property is located.¹⁶

Filing deadlines vary by county. A handful of counties, including Alameda, San Francisco, Santa Clara, and Ventura, set their deadline at September 15. Most other counties extend the window through November 30, or December 1 when November 30 falls on a weekend.¹⁷ Check with your county’s clerk of the board early. Missing the deadline forfeits your right to appeal for that assessment year.

Once your application is accepted, you may be scheduled for a hearing before the Assessment Appeals Board, or you can try to reach a negotiated agreement with the assessor’s office beforehand. Come prepared with evidence supporting a lower value: recent comparable sales, an independent appraisal, or documentation of property defects that affect what a buyer would pay. The hearing focuses on factual valuation. The board isn’t the place to argue that Proposition 13 should work differently.

Reporting Requirements and Penalties

California law requires you to notify the county assessor when a change in ownership occurs by filing a change-in-ownership statement. If you fail to file within 90 days after the assessor mails a written request, the penalty is $100 or 10% of the taxes on the new base year value, whichever is greater. For properties eligible for the homeowners’ exemption, the penalty caps at $5,000. For all other properties, the cap is $20,000.¹⁸

Legal entities face a separate reporting obligation. Any change in control of an entity that owns California real property must be reported to the Board of Equalization on Form BOE-100-B within 90 days of the change. The penalty for failing to report is 10% of the taxes on the new base year value.¹⁸ These penalties are added directly to your tax roll and are difficult to get waived, so filing the required paperwork promptly, even when you believe the transfer might be excluded from reassessment, is worth the effort.

1
California Legislative Information. California Revenue and Taxation Code 110.1
2
California State Board of Equalization. Change in Ownership
3
California State Board of Equalization. California Property Tax – An Overview
4
FindLaw. California Constitution Article XIIIA, Section 2
5
California Legislative Information. California Revenue and Taxation Code 51
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California State Board of Equalization. 2025-26 California Consumer Price Index
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California Legislative Information. California Revenue and Taxation Code 70
8
California State Board of Equalization. Legal Entity Ownership Program (LEOP) – Definition of Change in Ownership
9
California Legislative Information. California Revenue and Taxation Code 63
10
California State Board of Equalization. Proposition 19 – Board of Equalization
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California State Board of Equalization. BOE Adjusts the Proposition 19 $1 Million Intergenerational Transfer Exclusion Amount
12
California State Board of Equalization. Prop 19 Base Year Value Transfer Guidance Questions and Answers
13
California State Board of Equalization. Proposition 19 Fact Sheet
14
California State Board of Equalization. Decline in Value – Proposition 8
15
California State Board of Equalization. Supplemental Assessment
16
California State Board of Equalization. Assessment Appeals FAQs
17
California State Board of Equalization. County Assessment Appeals Filing Period
18
California Legislative Information. California Revenue and Taxation Code 482