Recently, my office has received calls from concerned homeowners about property valuation in a declining market and what implications it may have on their property taxes. Home owners are asking, “Why are my taxes going up when my value is going down?” Here is a good explanation that was recently printed in Supervisor Pat Bates newsletter. “There are two values to look at when considering property taxes: the Market Value and the Proposition 13 Taxable Value. The Market Value is what the property would sell for in an open market transaction. The Prop. 13 Taxable Value is the Market Value of the property when it was purchased, plus a Consumer Price Index (CPI) adjustment of up to 2% per year, plus any new construction. In calculating property taxes each year, the Assessor compares these two values and the lower of the two is always used.Therefore, even if a property experiences a decrease in Market Value, if the Market Value is still higher than the Prop. 13 Taxable Value, a CPI adjustment may be added by up to 2% annually. Using this formula, taxpayers always benefit because they always pay the lower of the two amounts.” For more information about Market and Taxable Values, please click here. You may also contact the Assessor Department with any questions by calling (714) 834-2727 or visiting www.ocgov.com/assessor