Considering COVID-19 in 2020 property tax assessments

A decline-in-value for a 2020 property tax filing due to the crisis could prompt the assessor to enroll the lower fair-market value, a one-year exception that would be re-evaluated in 2021.
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By Jeff Prang, Los Angeles County Assessor

I’ve been thinking lately about the stress caused by COVID-19 and how we all deal with it. Needless to say, it’s been a traumatic experience for everybody, especially for those that have suffered firsthand with the virus. I want to extend my deepest condolences to anyone that has lost loved ones to the coronavirus. My thoughts and prayers are with you.

In addition to the loss, we have the self-isolation, physical distancing and now the ubiquitous masks and gloves. Our daily lives have been turned upside down and may stay that way for quite some time. We will make it through this crisis — together. We will prevail. Absolutely. 

Back to the business at hand. There’s an issue that directly affects homeowners that could end up being a savings, and I want them to know about it. I’m going to try and provide some clarity on this situation that oftentimes gets confused because, simply, it can be confusing.

I’m talking about when your property suffers a decline-in-value or DIV, as it’s more commonly known among us assessor-types.

Let’s start at the beginning: For property tax purposes, the 2020 annual bill going out in October is based on the assessed value as of January 1, 2020, also known as the lien date.

If the fair market value on the lien date turns out to be less than the original assessed value, a temporary decline-in-value may be in order. To determine if a property’s value has declined, comparable sales are reviewed 90 days from the lien date. 

It’s quite possible that the pandemic will cause the market value of homes to decrease and a decline-in-value assessed. If that holds true, the Assessor may enroll the lower fair-market value. Remember: This is not a permanent reduction; it is valid for one year, and will be reviewed again the next year. Eventually, the full Prop. 13 trended base-value will be restored.

So, one question that begs an answer is when does a homeowner file for a review of such a value decrease? Prior to the pandemic, Southern California home sales experienced a 14% increase and a 6% increase in home prices, according to data released from DQNews for sales that closed in February.  

Which means the effects of the coronavirus might not be reflected on market values until after April. As such, it might not result in a decline-in-value for a 2020 filing. Filing for a 2020 decline-in-value begins July 2 and ends Nov. 30. 

However, the Assessor’s Office will proactively review market values and send out decline-in-value notices for properties experiencing such a decline. The most effective time for the homeowner to file for the decline directly related to the coronavirus could turn out to be July 2, 2021.

The Safer At Home order for Los Angeles County went into effect March 19, 2020, nearly three months after the lien date for that year. 

I know this sounds confusing because it is somewhat. But my office will be proactively monitoring the situation. 

As with most everything for the taxpayer, there is an appeal process if the homeowner disagrees with the DIV, but that is for a later discussion.

For now, please contact the Assessor’s Office for additional information on the decline-in-value process. We can be reached at (213) 974-3211 or at [email protected] Or you can go directly to my website at assessor.lacounty.gov/decline-in-value for a complete explanation of the process, including a DIV printable brochure that can be downloaded.

Hopefully, we will be able to visit in person someday soon after our public health officials ease restrictions. Until that day, please, stay heathy and safe.

Los Angeles County Assessor Jeff Prang has been in office since 2014. Prang implemented sweeping reforms to ensure that the strictest ethical guidelines rooted in fairness, accuracy and integrity would be adhered to in his office, which is the largest office of its kind in the nation with 1,400 employees and provides the foundation for a property tax system that generates $17 billion annually.

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