Base-Year Value
Your base-year value is the market value the assessor assigned to your home the last time it changed ownership or underwent new construction (or in 1975, if you have owned it that long). Under California's Proposition 13, this figure is the anchor for your property tax, and it grows by no more than 2% per year.
Why it matters to a homeowner
Almost every number on your tax bill traces back to your base-year value. Because it is set at purchase and rises slowly, it is usually far below today's market price for long-time owners. Knowing yours tells you whether the county is taxing you correctly and whether you have grounds to ask for a reduction.
A concrete example
If you bought your home and the assessor set the value at $700,000, that is your base-year value. Each year it is adjusted upward by the lower of inflation or 2%, producing your factored base-year value. After a few years it might sit near $735,000, even if comparable homes are now selling for more.
How it affects your assessment or appeal
Your assessment cannot exceed your factored base-year value unless you sell or build. So when you appeal, the key question is whether your home's market value on the lien date fell below that factored figure. If it did, Proposition 8 entitles you to the lower value for that year.
For the official definition, see the State Board of Equalization's Decline in Value – Proposition 8 page and its California Property Tax overview (Publication 29).
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