Thursday, October 16, 2008

Lowering your Tax Basis or Proposition 8

Proposition 8

I was surprised by the Mercury News publishing an article about Proposition 8 right around the deadline to have your taxes re-evaluated for the current tax year. Almost as if they were saying, “look at what you can’t have!”

Based on Proposition 8, you can submit a request form to have your taxes re-evaluated based on declining values. Important - the Assessor will only consider the market value of your property as of the lien date (which is January 1st). It is also important to know that the deadline to make this request is September 15th. After that date, all requests will be applied to the next tax year.

Proposition 8 passed in November 1978 and amended Proposition 13 to reflect declines in value. Prop 8 reductions in value are temporary reductions which recognize the fact that the current market value of a property has fallen below its current (Prop 13) assessed value.

If want to know more about Proposition 8, you can go online to which will take you to the website for the Office of the Assessor in Santa Clara County. Type Proposition 8 in the search engine and it will take you to the information you will need.

I’m recommending to my clients who are interested in lowering their taxes to wait until next January when we can look at the market value at that time and how those values compare to their current tax basis.

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