When will the base value and assessed value of a property be the same?

The base value and assessed value of a property will be the same when the improvement was built this year because, in California, new construction is assessed at its fair market value, which becomes the new base value. This aligns with Proposition 13 regulations, under which properties are assessed based on their market value at the time of purchase or when new construction occurs.

When an improvement is constructed in the current year, it is assessed at its full market value upon completion, thus making the base value (the original assessed value) and the assessed value (the value for tax purposes) identical. This happens because there has not been any precedent for adjustments due to additional market fluctuations or depreciation at the point of the new construction.

In contrast, when a property is sold or rented, the assessed value may not immediately adjust to reflect those changes in market conditions, and an increase in market value does not instantaneously affect the assessed value. The assessed value is typically recalibrated only during specific intervals or events, such as failing to meet the requirements for reassessment upon sale or rental activity.