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assessed value for tax purposes in 1995 and 1996 was $400,000.
Under California law, however, assessment values may not be
determinative of FMV because the assessed value is generally
limited to a 1-percent increase on the property’s base year
value, i.e., the property’s 1975-76 market value level or
appraised value when purchased. Cal. Const. art. XIII(A), secs.
1 and 2 (West 1996); Cal. Rev. & Tax Code, sec. 110(a) (West
1998). However, when the property’s FMV falls below the base
year value, the assessed value for tax purposes would be based on
the property’s FMV until the base year value is restored. Cal.
Const. art. XIII(A), sec. 2(b) (West 1996);5 Cal. Rev. & Tax
Code, sec. 51(a) (West 1998). Thus, although the county
assessor’s appraisal record is not determinative of the Stewart
property’s FMV, it is persuasive evidence that petitioners’
estimate was overly inflated given the state of the real estate
market in 1995.
The Court is satisfied from the record that the FMV of the
Stewart property in July 1995 was $435,000. The fact that the
property languished on the market with an asking price of
$435,000 in November 1995 indicates that the value of the house
5 On Aug. 18, 1978, the Cal. Legislature adopted Senate
Const. Amend. No. 67, which was eventually designated as
Proposition 8 and placed on the ballot and submitted to electors
at the 1978 General Election. On Nov. 7, 1978, the voters
adopted Proposition 8, which amended Cal. Const. art. XIII(A),
sec. 2, specifically providing a temporary reduction in the base
year value to reflect a decline in real property value.
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