Decline in Value Assessment


When an economic downturn occurs, it may affect the local real estate market causing housing and commercial values to drop. The law provides property tax relief to property owners if the value of their property falls below its assessed value.

Generally, property is assessed at the lesser of two values:

  1. Factored base year value (typically the purchase price adjusted annually for inflation, not to exceed 2% per year) or
  2. Current market value on January 1.

When the market value is the lesser value, the “Decline in Value Assessment Program” (Proposition 8) allows for a temporary reduction in assessed value.

If a property is enrolled in the Decline in Value Assessment Program, its assessed value is subject to annual review in subsequent years in light of current economic and market factors. For example, the assessed value may be:

  • increased to no more than the “factored base year value”, or
  • held at the prior year’s assessed value, or
  • reduced further.

Proposition 8 Assessed Value Increases Exceeding Two Percent (Restoration)

Some San Mateo County property owners whose properties were in the Decline in Value Assessment Program may see an increase (restoring to factored base year value) in their assessment values by more than two percent (2%).

Note: Although Proposition 13 expressly limits annual increases in a property’s “factored base year value” to no more than two percent per year, there is no such limitation on annual increases to a property’s assessed value in the Proposition 8 program, as long as the factored base year value is not exceeded.

The last day the Assessor will be accepting applications for a “Decline in Value” for the 2021-22 tax year is November 1, 2021. If you wish to pursue a “Decline in Value” Reassessment for the 2021-22 tax year please file an Assessment Appeal.

Submit the request online PDF "Decline in Value" Reassessment Application Form