Many homeowners were shocked to see an increase in their property tax bills from last year, given the widespread drop in housing prices. Most homeowners saw their bills increase because the assessed value of their property is often different than the market value. This is due to Proposition 13 which rolled property assessments back to 1975 levels and capped the annual increase at 2 percent. A property can be reassessed if it changes hands or the living area is enlarged. Under Proposition 8 – (a 1978 initiative, not this years gay marriage initiative)- counties are required to reassess a property when the market value falls below the assessed value, but many times it is not automatic.
If you purchased your home when prices were much higher, chances are your assessed value is much higher than the current market value. Every county assessor's office offers a process to appeal your property assessment. The Los Angeles County website is: www.lacountypropertytax.com and the Orange County website is www.ac.ocgov.com/newpage/taxinfo.asp Theses websites are very helpful and have the forms and instructions for you to follow.
BEWARE: There are private companies posing as government agencies offering to lower their property tax for a fee. This is a SCAM, there is no fee for the county to review the appeal application.