Following the recent mailing of annual Notices of Assessed Value, Nevada County Assessor Rolf Kleinhans and the Assessor’s Office are helping property owners better understand the two California laws that most commonly determine a property’s assessed value, Proposition 13 and Proposition 8. Both measures were approved by California voters in 1978, which serve different purposes and affect property values differently. Annual Notices of Assessed Value indicate whether a property is currently being assessed under its Proposition 13 value or is receiving a temporary reduction under Proposition 8.

Proposition 13 is the foundation of property assessment and taxation in the state of California. When property changes ownership or undergoes new construction, the property is typically assessed at the sale price or market value of the improvements, which becomes the property’s base year value. In future years, that value may increase by no more than two percent annually to account for inflation regardless of how much market values increase. Property taxes are calculated at one percent of the assessed value, plus any voter-approved taxes and special assessments.

This system provides property owners with stability and predictability by limiting annual increases in assessed value even during periods of rising real estate prices.

Proposition 8 provides relief when real estate market values decline. If a property’s market value on the January 1 lien date falls below its Proposition 13 factored base year value, the Assessor is required to temporarily reduce the assessed value to reflect current market conditions.

A decline in market value may result from factors such as a general decline in the local real estate market or damage caused by natural disasters such as wildfire or severe storms. Property owners who believe the market value of their property as of January 1, 2026, is lower than the assessed value shown on the notice may request a free Informal Assessment Review to determine if their property qualifies for assessment under Proposition 8.

Proposition 13

  • Establishes the taxable base year value for property
  • Annual increases limited to 2%
  • Reassessment of property generally occurs only upon change in ownership or new construction
  • Provides long term assessment stability and predictability

Proposition 8

  • Provides temporary tax relief when market value declines
  • Assessments rise or fall with the market, and do not have a two percent limit
  • Value can never exceed a property’s Proposition 13 factored base year value

Learn More

For additional information about how property is assessed for property tax purposes, please visit the California State Board of Equalization’s Information Sheet.

Additional questions?

Visit us online at Nevada County Assessor’s Office, email us at assessor@nevadacountyca.gov, call 530-265-1232 or stop by our office at 950 Maidu Avenue in Nevada City.