Commercial Owners Seeking Temporary Property Tax Reduction for 2021-22
The Santa Clara County Assessor’s Office is preparing to respond to the impact Covid-19 has had on commercial property (land and buildings) values. The Assessor’s Office has the authority to temporarily reduce property tax assessments in accordance with Proposition 8 if the market value—as of January 1—falls below the 2020 assessed value. Proposition 8 only allows for temporary reductions on land and buildings. However, tenants, such as hair and nail salons or restaurants, may receive reductions through a property owner in accordance with their lease.
Owners of commercial property (land and buildings) are requested to provide data by February 26. Below are examples of the requested industry-specific data. This information will be used by the Assessor’s Office to evaluate potential opportunities to reduce 2021-22 property taxes for commercial properties most impacted by Covid-19.
To apply for a reduction, applicants are encouraged to have the above data compiled electronically prior to completing the on-line application below.
State law allows the Assessor to temporarily reduce the assessed value of mobile home in certain cases where the fair market value is lower than the assessed value. If this may be the situation for a mobile home you own, request forms are available to view and/or print by clicking below. They are also available by calling or writing the Assessor's Office.
THE DEADLINE TO FILE THIS FORM FOR THE 2020-2021 ASSESSMENT ROLL ENDS AUGUST 1. To apply for a reduction for the 2020-2021 Assessment Roll please visit the Assessor's website after you receive your notification card in June 2020.
Proposition 8 was passed in November 1978 as an amendment to Proposition 13 and implemented as Revenue & Taxation Code Section 51(a)(2). It annually caps the assessed value of property as of the lien date (January 1) at the lesser of its market value or its factored base year value.
HOW IT WORKS
Proposition 8 allows a temporary reduction when the market value of property has fallen below its factored base year value as of the January 1 lien date. Once a Prop 8 reduction has been enrolled, the property’s assessment must be reviewed annually to ensure that the lesser of the market value or the factored base year value is enrolled.
The property’s base year value continues to be factored at a maximum two percent per year, setting its maximum assessed value. As the market recovers the market value of a property will increase based on market conditions which are not restricted to a two percent growth. The value enrolled will follow the market growth rate until the market value exceeds the factored base year value and the lower factored base year is enrolled.
Factored base year value: the value established as of the date of acquisition and/or completion of new construction. This value is adjusted each year by an inflation factor. The inflation factor is the lesser of 2% or the California Consumer Price Index (CCPI) rate.
For more information about factored base year value, see Understanding Proposition 13.