Under California’s property tax system (established by Proposition 13), property is generally reassessed to current market value only when there is a change in ownership or new construction.

When new construction occurs, the Assessor is required to determine the value of the work completed and add that value to the property’s existing assessment.

What Counts as “New Construction”?

“New construction” includes:

  • New buildings or structures
  • Additions to existing structures (such as new rooms or expanded floor area)
  • Physical alterations that convert a property to a different use

Routine maintenance, cosmetic updates, and normal repairs—such as painting, replacing a roof with similar materials, or swapping out broken fixtures—are not considered assessable new construction. However, major remodels or improvements that substantially extend the property’s useful life or add new components that were not part of the property at the time of acquisition are considered assessable new construction.

How New Construction Is Assessed

Only the value of the new construction itself is assessed at current market value. The assessment of the existing structure and land remains at its prior factored base-year value.

The Assessor determines:

  1. What work was done
  2. Whether it qualifies as assessable new construction
  3. The market value of the new construction

When Is New Construction Considered “Complete”?

New construction is typically considered complete when:

  • The building permit is finalized, or
  • The work is ready for its intended use, even if permits are still open

If you occupy or use the improvement before final inspection, the “date of completion” may be the date of first use.

Partial Assessments

If construction spans more than one year, the Assessor must issue a partial assessment based on the stage of completion as of January 1, the state’s annual lien date. Partial assessments do not generate separate tax bills; instead, the value is incorporated into the annual property tax bill.

Supplemental Assessments

When new construction is completed, the Assessor issues a supplemental assessment that reflects the difference between:

  • The property’s value before completion, and
  • The value on the date the new construction is finished

This results in an additional tax bill (or, in rare cases, a refund).

Discovery of New Construction

Building permits are a major source of information for the Assessor. If you complete work without a permit, or if the scope of work differs from what was permitted, the Assessor is still required to assess any qualifying new construction.

Owner-Builders

Owner-Builders can save money on construction by doing the work themselves, however, the assessment must include the full market value of the construction and includes required components such as labor, profit, supervision and financing which would not typically be found in the construction costs of an owner-builder.

How to Help Ensure an Accurate Assessment

  • Provide detailed information when requested by the Assessor’s Office
  • Respond promptly to property-specific questionnaires or site-inspection requests

Notify the Assessor if construction is delayed, phased, or different from what is shown on permits.

Under California law, some construction may qualify for an exclusion from reassessment. Please review the list of exclusions below to see whether your project may be eligible.

California law provides that certain construction, installations, or modifications of existing single- or multiplefamily dwellings can be excluded from increases in property taxation if the work is performed to make the dwelling more accessible to a severely and permanently disabled person who is a permanent resident of the dwelling. This exclusion does not apply to accessibility improvements and features that are usual or customary for comparable properties not occupied by disabled persons, but will apply only to those improvements or features that specifically adapt a dwelling for accessibility by a severely disabled person. Claim form and physician's certification required.

Download BOE 63 Form

Excludes construction, installation, removal or modification of any portion or structural component of an existing building or structure to the extent that it is done for the purpose of making the existing building or structure more accessible to, or more usable by, a disabled person. Claim form must be filed prior to or within 30 days of the completion of construction.

Download BOE 63-A Form

An exclusion from supplemental assessment, upon completion of construction, if the builder intends to offer the property for sale. Does not exclude the assessment of completed or partially completed construction on the lien date, January 1st of each year. Requires the filing of an application prior to or within 30 days of the start of construction.

Download Builder's Exclusion Form

Excludes from assessment that portion of an existing structure that consists of the construction and reconstruction of seismic components. Claim form must be filed prior to or within 30 days of the completion of construction.

Download BOE 64 Form

California law provides that under certain circumstances the initial purchaser of a building with an active solar energy system may qualify for a reduction in the assessed value of the property. In order to qualify for this reduction, this claim form must be completed and signed by the buyer and filed with the Assessor.

Download BOE 64-SES Form

California law provides that under certain circumstances the initial purchaser of a building with a rain water capture system may qualify for a reduction in the assessed value of the property. In order to qualify for this reduction, this claim form must be completed and signed by the buyer and filed with the Assessor.

Download BOE 64-RWC Form

The timely reconstruction of property that was damaged or destroyed in a calamity may be excluded from assessment as “new construction”. When the rebuilt structure is similar in size, utility, and function to what existed before the damage, its original Proposition 13 base year value can be restored—regardless of the actual cost of reconstruction—up to 100% of the portion of the structure that was previously assessed.

Any new square footage or extras, such as additional baths, will be added to the restored base year value at its full market value.

To ensure the Assessor's Office is aware of the calamity, property owners should file a claim form within 12 months of the date of the disaster, even if reconstruction has not yet begun. Link to ASRR6

Download Form