Filed 12/21/23

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

YAAKOV and SARAH 

GREENSPAN, Individually and as 

Cotrustees of the GREENSPAN 

FAMILY TRUST, 

Plaintiffs and Appellants,

v.

COUNTY OF LOS ANGELES et 

al.,

Defendants and

Respondents.

 

 B323864

 (Los Angeles County

 Super. Ct. No.19STCP03626)

APPEAL from a judgment of the Superior Court of 

Los Angeles County, David Sotelo, Judge. Reversed and 

remanded, with directions.

Westland Real Estate Group, Asher B. Fried, and Bashir 

Eustache, for Plaintiffs and Appellants. 
2

Dawyn R. Harrison, County Counsel, and Drew M. Taylor, 

Deputy County Counsel, for Defendants and Respondents.

____________________________

Proposition 13, adopted by voters in 1978, amended 

California’s Constitution to limit real property taxes to 1 percent 

of a property’s base-year value, with an annual 2 percent cap for 

inflation. A property’s base-year value may be reestablished only 

upon purchase, new construction, or a change in ownership. In 

addition, the assessed value of the property must be allocated 

between land and improvements. 

In April 2014, appellants Yaakov and Sarah Greenspan 

purchased a 2,400-square-foot home in Long Beach for $900,000. 

The County of Los Angeles (County) appraised the property with 

a new base-year value of $900,000, allocating $540,000 to the 

land and $360,000 to the improvements. In 2016, the 

Greenspans demolished the original residence, except the garage, 

and built a new single-family home on the property.

Under Revenue and Taxation Code sections 51 and 75.10,

1

the value of any structure removed by a homeowner is to be 

deducted from the prior base-year value. Once new construction 

is completed, the value of the new construction is appraised and 

assigned a new base-year value going forward, which is then 

added to the existing base-year value allocated to the land. 

This is not what occurred in this case. Instead, the Los 

Angeles County Assessor (Assessor) took the value of the

1 All further statutory references are to the Revenue and Taxation 

Code unless otherwise specified. 
3

structure demolished ($320,000) and reallocated that entire 

amount to the land portion of the purchase price, leaving a 

$40,000 “credit” for the remaining garage. This resulted in a new 

allocation of the original purchase price of $860,000 to land and

$40,000 to improvements. The Assessor then separately 

appraised the value of the new construction at $1,183,130 and 

added this amount to the reallocated land and improvements. 

The County’s justification for the failure to give the 

Greenspans credit for the demolished residence was a policy

allowing an assessor to reallocate to land any portion of the 

property substantially renovated within two years of the 

purchase date on the assumption the owner purchased the 

property for land value alone. The County argues that it can do 

this because section 51.5 allows for the correction of any errors or 

omissions made in the original determination of the base-year 

value.

The Greenspans filed separate applications to the Los 

Angeles County Assessment Appeals Board (Board) challenging 

(1) the County’s reallocation of their original purchase to

primarily land as a practice contrary to statutory law, and (2) the 

County’s valuation of their new construction as excessive. After 

prevailing on their new construction challenge, the Greenspans 

filed suit against the County in superior court challenging the 

Board’s denial of their reallocation appeal and seeking repayment 

for any taxes overpaid. The trial court denied relief and entered 

judgment in favor of the County. On appeal, the Greenspans 

contend, and we agree, that the County’s reallocation of their 

base-year land and improvement value was contrary to statutory 

law. The Assessor’s automatic reallocation of the base-year value 

for the entire structure removed (with “credit” for the remaining 
4

garage) cannot be squared with sections 51 and 75.10, which 

command that a property owner receive a reduction in previously 

assessed base values for portions of any property removed. To 

the extent section 51.5 allows for error correction, that statute 

was enacted with an extensive legislative declaration stating any 

such corrections must be consistent with Proposition 13 and 

existing statutory valuation standards. In light of this statutory 

scheme, the Board’s denial of the Greenspans’ allocation appeal 

was legal error subject to our judicial correction. 

We therefore reverse the trial court’s judgment and direct 

the trial court to enter a new judgment vacating the decision of 

the Board and remanding the matter for further proceedings 

consistent with this opinion.

FACTUAL AND PROCEDURAL BACKGROUND

A. The Framework for Tax Refunds

When a taxpayer seeks to challenge the assessment of its 

property, it may petition the Board for a reduction. (Fisher v. 

County of Orange (2022) 82 Cal.App.5th 39, 51 (Fisher).) 

“‘Although a local assessment appeals board decision arises from 

an administrative hearing process, the mechanism for seeking 

judicial review of the decision is “‘significantly different from that 

of other administrative agency decisions. Ordinarily, the 

aggrieved taxpayer’s remedy is not to seek administrative 

mandate pursuant to Code of Civil Procedure section 1094.5, but 

to pay the tax and file suit in superior court for a refund.’”’”

(Ibid.; accord, William Jefferson & Co., Inc. v. Orange County 

Assessment Appeals Bd. No. 2 (2014) 228 Cal.App.4th 1, 10–11 

(William Jefferson).)
5

B. Property Purchase and Initial Assessment in 

2014

On March 20, 2014, the Greenspans purchased a home on 

Locust Avenue in Long Beach, California for $900,000.2 The 

change in ownership triggered a reassessment of the property. 

The Assessor appraised the property with a new base-year value 

(i.e., total taxable value) of $900,000, the purchase price, and 

allocated that value as follows: $540,000 for the land and 

$360,000 for the improvements on the property. 

In February 2016, the Greenspans started a substantial 

renovation of their property, which was completed on 

December 28, 2016. The Greenspans assert that they initially 

did not intend to remove the original residence but found it was 

necessary to do so once renovation was underway. They 

ultimately demolished the original residence, except the garage, 

and built a new single-family residence on the property.

C. Reallocation of 2014 Base-Year Values

In 2017, based on the Greenspans’ demolition of the 

original residence, the Assessor modified the 2014 base-year 

value of the property, allocating more of the purchase price to the 

land than to the improvements that were on it. While the 

improvements were initially assessed at $360,000, the Assessor 

reduced that to $40,000 in recognition that only the original 

garage remained. This resulted in a base-year land value of 

$860,000, with $40,000 in remaining improvements.

2 On February 13, 2017, appellants transferred the property to 

themselves as cotrustees of the Greenspan Family Trust, a revocable 

living trust. 
6

The County then issued “an adjusted property tax bill” for 

the 2016–2017 roll year. Prior to the adjustment, the 2016–2017

base value for the property was a total of $931,979, with an

allocation of $559,188 to land and $372,791 to improvements.

3 

After modification, the total value was $931,980, with $890,559

allocated to land and $41,421 allocated to improvements.4 

In an email exchange with the Assessor’s office, the 

Greenspans asked why they did not “get credit for the old house.” 

The Appraiser responded, “[W]e look at when you purchased the 

property and when you requested the permit to demolish. The 

purchased [sic] date we have is [April 29, 2014,] and the permit to 

demolish the property was requested on [January 19, 2016,] and 

the permit to build was requested on [February 5, 2016]. 

Unfortunately it did not go beyond the two years.” After the 

Greenspans asked the County’s appraiser “to send . . . the code 

that references the [two-year] requirement,” he responded that 

“[t]he [Revenue and Tax] code that allows us to reallocate the 

value from the improvement to land can be found on the [Board 

of Equalization] website . . . section 51.5b.” He added, “[T]o be 

exact[,] the portion of the garage that was not demolished was 

given as credit.” 

3 This amount reflects the initial purchase price allocations, plus 

any standard inflationary increases permitted by Proposition 13. 

4 We observe that although this base value is $1 higher than the 

prior total base value, neither party attaches any significance to this

$1 difference. 
7

D. Appraisal of the Newly Constructed Residence

In 2017, the Assessor also appraised the new residence the 

Greenspans constructed and issued a “supplemental property tax 

bill” for the 2016–2017 roll year. The notice reflected a “net 

assessed value” of $1,183,130 due to the “completion of new 

construction occurring [December 28, 2016].” The Assessor 

valued the new construction at $1,183,130, estimating the costs 

of the various improvements added to the property by the new 

construction. This amount was then added to the previously 

reallocated land value of $890,559 and improvements of $41,421, 

for a total sum value of $2,115,110.

E. The Appeal Before the Board

The Greenspans separately appealed (1) the Assessor’s 

modification of the initial base-year allocations between land and 

improvements, and (2) the supplemental assessment of the new 

construction completed on December 28, 2016. The Greenspans 

argued (1) the method used by the County in 2017 to 

retroactively reallocate the 2014 value of their original purchase 

between the land and improvements was based on an improper 

presumption and contrary to statutory law, and (2) the value the 

County assigned to their newly renovated home was excessive.

In their applications, the Greenspans set out their 

challenges to the valuation numbers as follows:

4. Value A. Value on Roll B. Applicant’s 

Opinion of Value

Land $890,559 $559,188

Improvements/Structures $1,224,551 $1,041,421

TOTAL $2,115,110 $1,600,609
8

At an initial hearing on January 31, 2018, a Los Angeles 

County Assessment Hearing Officer agreed with the Greenspans’

position in both appeals. The hearing officer recommended to the 

Board that the value of the property be allocated between the 

land and improvements according to the values the Greenspans 

assigned to them in their applications for relief.

The Assessor rebutted the hearing officer’s 

recommendation, and a hearing before the Board was set for 

February 22, 2019. At the hearing, the County presented new 

pre-construction and post-construction appraisal reports bearing 

the dates February 5 and February 21, 2019, respectively. The 

pre-construction appraisal compared the property to three 

smaller vacant-land lots and valued the property as if it were

vacant land on December 28, 2016. The post-construction 

appraisal valued the property with the new construction 

completed as of December 28, 2016, and recommended a 

reduction in value from $1,183,130 to $963,350 for the new 

construction.

On February 28, 2019, the Board issued its decision in both 

appeals.5 The Board denied that the value of the property had 

been incorrectly allocated between land and improvements. 

However, the Board recommended the value of the postconstruction improvements be reduced. In reaching its decision, 

the Board set out the final valuation numbers as follows:

5 The Greenspans did not request findings of fact from the Board. 
9

Prior Tax Value Board Found 

Value

Net Change in 

Value

Land $890,559.00 $890,559.00 $0.00

Improvements $1,224,551.00 $1,004,771.00 ($219,780.00)

Taxable Value $2,115,110.00 $1,895,330.00 ($219,780.00)

F. The Trial Court Refund Action

On September 27, 2019, the Greenspans filed their first 

amended complaint (FAC), the operative pleading in the trial 

court. The FAC sought a refund of any excess taxes paid based

on the reallocation of improvements to land that occurred as of

2016. In the alternative, the complaint sought an order 

remanding the matter to the Board for reconsideration of the 

2016 assessment that did not utilize the reallocation practice that 

the Assessor had employed previously. 

On April 8, 2022, the trial court ruled in favor of the 

County. It entered judgment on June 15, 2022. The Greenspans 

timely appealed. 

DISCUSSION

A. Standards of Review

The Board’s “‘“‘factual determinations are entitled on 

appeal to the same deference due a judicial decision, i.e., review 

under the substantial evidence standard.’ [Citation.]” [Citation.]

When the assessment appeals board decides a question of law, 

such as the interpretation of a statute, courts are authorized to 

conduct an independent reassessment.’” (Fisher, supra, 82 

Cal.App.5th at p. 51; accord, Manson Construction Co. v. County 

of Contra Costa (2020) 56 Cal.App.5th 1079, 1087.)

When interpreting a statute, “our core task . . . is to 

determine and give effect to the Legislature’s underlying purpose 
10

in enacting the statutes at issue.” (McHugh v. Protective Life Ins. 

Co. (2021) 12 Cal.5th 213, 227; accord, Jarman v. HCR 

ManorCare, Inc. (2020) 10 Cal.5th 375, 381.) “We first consider 

the words of the statutes, as statutory language is generally the 

most reliable indicator of legislation’s intended purpose. 

[Citation.] We consider the ordinary meaning of the relevant 

terms, related provisions, terms used in other parts of the 

statute, and the structure of the statutory scheme.” (McHugh, 

supra, at p. 227; accord, Jarman, supra, at p. 381.)

B. Agency Rules, Handbooks, and Annotations

Pursuant to Government Code section 15606, 

subdivision (c), the State Board of Equalization (SBE) has 

promulgated regulations that are referred to as the “Property Tax 

Rules” and are located at Title 18, Public Revenues, Chapter 1 of 

the California Code of Regulations. The Property Tax Rules 

“have the force and effect of law.” (Prudential Ins. Co. v. City and 

County of San Francisco (1987) 191 Cal.App.3d 1142, 1152.) 

The SBE has also issued handbooks for use by assessors

throughout the state. (Torres v. San Francisco Assessment 

Appeals Bd. No. 1 (2023) 89 Cal.App.5th 894, 899–900 (Torres).) 

“‘“Although assessors’ handbooks are not regulations and do not 

possess the force of law, they . . . have been relied upon and 

accorded great weight in interpreting valuation questions.”’” (Id.

at p. 900; Sky River LLC v. County of Kern (2013) 214 

Cal.App.4th 720, 735–736.)

Finally, the SBE periodically publishes non-binding, 

advisory “Annotations” on its website. (Cal. Code Regs., tit. 18,

§ 5700.) According to the SBE, these Annotations “are a research 

tool” and contain its counsel’s opinions regarding “the application 
11

of the statutory law, regulatory law, or judicial opinions to a 

particular factual circumstance.” (Id., tit. 18, § 5700, subd. (c); 

Phillis v. County of Humboldt (2020) 59 Cal.App.5th 432, 443

(Humboldt).)

Where the SBE has not adopted a formal rule or regulation 

concerning a particular tax issue, its interpretation of the 

statutes and existing regulations in assessing taxes due is subject 

to broad judicial review. (See Wallace Berrie & Co. v. State Bd. of 

Equalization (1985) 40 Cal.3d 60, 65; see also Yamaha Corp. of 

America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 11

[“Unlike quasi-legislative rules, an agency’s interpretation does 

not implicate the exercise of a delegated lawmaking power; 

instead, it represents the agency’s view of the statute’s legal 

meaning and effect, questions lying within the constitutional 

domain of the courts”]; see also Farmers Ins. Exchange v. 

Superior Court (2006) 137 Cal.App.4th 842, 859 [observing that 

“[a]n agency’s ad hoc assertion of a statutory interpretation in a 

particular matter or in the course of litigation . . . does not 

engender the same degree of respect”].)6 

6 We take judicial notice of the Assessor’s Handbook and SBE 

Annotations. (County of San Diego v. Assessment Appeals Bd. No. 2

(1983) 140 Cal.App.3d 52, 59; Hunt-Wesson Foods, Inc. v. County of 

Alameda (1974) 41 Cal.App.3d 163, 180; see Fisher, supra, 82

Cal.App.5th at pp. 48–49; Evid. Code, §§ 452, subd. (c) [judicial notice 

may be taken of “[o]fficial acts of the legislative, executive, and judicial 

departments of . . . any state of the United States”], 459, subd. (a); cf. 

Humboldt, supra, 59 Cal.App.5th at p. 437 [discussing various 

annotations].) 
12

C. Proposition 13 and New Construction

1. Proposition 13 

“In California all real property and business personal 

property is taxable ‘in proportion to its full value’ unless 

specifically exempted. (Cal. Const., art. XIII, § 1, subd. (b).)” 

(County of Los Angeles v. Raytheon Co. (2008) 159 Cal.App.4th 

27, 34.) “In 1978, Proposition 13 amended the California 

Constitution to limit real property taxes to 1 percent of a 

property’s base[-]year value adjusted annually by an inflation 

factor not to exceed 2 percent of the prior year’s value. (Cal. 

Const., art. XIII A, §§ 1, subd. (a), 2, subd. (b); [citations].)” “A 

property’s base[-]year value may be reestablished only if the 

property is purchased, is newly constructed, or there is a change 

in ownership.” (William Jefferson, supra, 228 Cal.App.4th at 

p. 9; see Fisher, supra, 82 Cal.App.5th at p. 49; §§ 110.1, subd. (f), 

51, subd. (a); Cal. Code Regs., tit. 18, § 460, subd. (b)(5).) “Land 

and improvements shall be separately assessed.” (§ 607; Cal. 

Const., art. XIII, § 13.) 

The purchase price is rebuttably presumed to be the “full 

cash value” or “fair market value” if the terms of the transaction 

were negotiated at arm’s length in an open market. (§ 110, 

subd. (b).) Thereafter, entries onto the assessment roles are 

generally “‘“done pro forma without the need to exercise one’s 

judgment as to value, simply by applying an inflation factor to 

the previous year’s entry.”’” (Little v. Los Angeles County 

Assessment Appeals Bds. (2007) 155 Cal.App.4th 915, 918, fn. 1, 

internal citations omitted.) 

In the case of new construction, “additions, alterations, or 

other changes to existing property may trigger a partial 

reassessment under Proposition 13, such that a new base[-]year 
13

value will be established for the newly constructed portion of the 

property.” (Wunderlich v. County of Santa Cruz (2009) 178 

Cal.App.4th 680, 690 (Wunderlich)); § 71; Cal. Code Regs., tit. 18, 

§ 463, subd. (a).)7 

2. Statutory Valuation of New Construction

The valuation of new construction is addressed by several

sections of the Revenue and Taxation Code. (See generally Pope 

v. State Bd. of Equalization (1983) 146 Cal.App.3d 1132, 1135–

1136 (Pope) [observing the Legislature passed legislation to 

address concept of “newly constructed property” after voters 

adopted Proposition 13].) 

First, under section 51, if a portion of real property has 

been destroyed or removed, including “by voluntary action by the 

taxpayer,” the base-year value of the property going forward 

“does not include that portion of the previous base[-]year 

value . . . that was attributable to any portion of the property that 

has been destroyed or removed.” (§ 51, subds. (b), (b)(2), italics

added.) 

Second, under section 75.10, subdivision (a), an assessor 

must appraise construction at its full value on the date that it is 

completed and determine a new base-year value for the value of 

7 In 1983, the Legislature added various provisions to ensure that 

adjustments in assessed value were made as of the date a new event 

occurs (i.e., completion of new construction or change in ownership). 

These provisions were intended to eliminate any delay between 

valuation and reassessment and promote equity among taxpayers. 

(Chevron USA, Inc. v. County of Kern (2014) 230 Cal.App.4th 1315;

Shafer v. State Bd. of Equalization (1985) 174 Cal.App.3d 423, 426; 

Stats. 1983, ch. 498, § 133; §§ 71, 75, 75.10.) 
14

the new construction—“except as provided in . . . subdivision (b).” 

(§ 75.10, subd. (a).) Under subdivision (b), “the removal of a 

structure from land” qualifies as its own “new construction” event 

but requires that “the new base[-]year value of the remaining 

property (after removal of the structure) shall be determined in 

the same manner as provided in subdivision (b) of section 51.” 

(§ 75.10, subds. (a), (b).) Thus, section 75.10 is consistent with 

section 51 regarding the treatment of removed structures: the 

value of the removed structure must be deducted from the 

existing base-year value.

Consistent with these principles, section 71 provides that 

when new construction is complete, “[t]he assessor shall 

determine the new base[-]year value for the portion of any 

taxable real property which has been newly constructed. The 

base[-]year value of the remainder of the property assessed, which 

did not undergo new construction, shall not be changed.” (§ 71, 

italics and emphasis added.) 

The interaction of these statutes is reflected in Property 

Tax rule 463, subdivision (a) as follows:

“When real property or a portion thereof, is 

newly constructed after the 1975 lien date, the 

assessor shall ascertain the full value of such ‘newly 

constructed property’ as of the date of completion. 

This will establish a new base[-]year full value for 

only that portion of the property which is newly 

constructed, whether it is an addition or alteration.

The taxable value on the total property shall be 

determined by adding the full value of new 

construction to the taxable value of preexisting 
15

property reduced to account for the taxable value of 

property removed during construction. The full value 

of new construction is only that value resulting from 

the new construction and does not include value 

increases not associated with the new construction.” 

(Cal. Code Regs., tit. 18, § 463, subd. (a), italics and 

emphasis added.) 

Similarly, Property Tax rule 461 states, “[T]he prior year 

taxable value of real property, or portion thereof, physically 

removed from the site shall be deducted from the property’s prior 

year taxable value, provided that such net value shall not be less 

than zero.” (Cal. Code Regs., tit. 18, § 461, subd. (c).) 

Subdivision (a) of that section expressly recognizes that 

“[s]ection 2 of article XIII A of the California Constitution 

provides, with certain exceptions stated therein, that real 

property shall be reappraised if purchased, newly constructed 

(regulation 463) or a change in ownership occurs (regulation 462) 

after the original base year.” (Id., tit. 18, § 461, subd. (a); see also 

Pope, supra, 146 Cal.App.3d at p. 1135 [noting SBE adopted 

Property Tax rules 460 through 467 “to deal more broadly with 

the issues raised by article XIII A”].) 

Finally, section 410 of the Assessor’s Handbook

(“Assessment of Newly Constructed Property”) provides the 

following example of the interaction of these statutes and 

regulations:

“A taxpayer purchased a 1,200[-]square-foot 

home for $400,000, with $350,000 allocated for land 

and $50,000 for improvements. The home is located 
16

in a highly coveted neighborhood that has seen many 

average homes renovated into large mansions. The 

taxpayer gutted the home to its foundation and studs, 

built a new perimeter foundation to support 

additional floors, and rebuilt the home into a threestory, 3,600[-]square-foot mansion.

The new construction converted the renovated 

structure to the status of substantially equivalent to 

new. The base[-]year value of the improvements 

should be reappraised to the current market values of 

other comparable properties in the area. A portion of 

the existing base[-]year value should be retained for 

the studs and foundation system that were not 

removed. The base[-]year value of the land would not 

change.”

(California State Board of Equalization, Assessor’s Handbook 

(AH), § 410: Assessment of Newly Constructed Property (May 

2014, reprinted Jan. 2015), p. 29, italics added.)

In sum, the Revenue and Taxation Code sections, Property 

Tax rules, and the Assessor’s Handbook are consistent on this 

point: After a property is purchased and acquires a new-base 

year value, the value of any subsequently removed structure is to 

be deducted from the base-year value. When the new 

construction is completed, any new improvements are appraised 

and assessed and their value is then added to the existing base 

values. The value of the unchanged portion of the property, 

however, remains the same. This allows a purchaser to retain 
17

their Proposition 13 benefits going forward for any property that 

remains unchanged. 

Property Tax rule 463 recognizes these principles by 

stating: “In any instance in which an alteration is substantial 

enough to require reappraisal, only the value of the alteration 

shall be added to the base[-]year value of the pre-existing land

or improvements. Increases in land value caused by 

appreciation or a zoning change rather than new construction 

shall not be enrolled . . .” (Cal. Code Regs., tit. 18, § 463, 

subd. (b)(2)(A), italics and emphasis added.) 

The County neither discusses nor denies the existence of 

these statutes regarding the valuation of new construction. 

D. The County’s Reallocation of the Value of Removed 

Property to the Land Value Was Contrary to Law

It is undisputed the Assessor reallocated the entire value of 

the improvements removed by the Greenspans to their purchaseprice base-year land value based upon the non-binding analysis 

of SBE’s counsel embodied in Annotation 170.0005 on the SBE

website. 

1. Annotation 170.0005

Annotation 170.0005 contains the following summary of a

letter issued by SBE counsel in August 2005: 

“Allocation to Value. An assessor may reallocate land 

and improvement values for a single-family residence 

when a property is substantially renovated within two 

years of its original purchase. Revenue and Taxation 

Code section 51.5 allows an assessor to correct any 
18

base[-]year value error or omission within four years 

after enrolling an assessment if that error was the 

result of the exercise of value judgment.” 

The cited letter issued by SBE counsel reflects the following

response to an inquiry sent by a taxpayer:8 A property owner 

acquired a single-family residence in October of 2003 for 

$245,000, and the Assessor allocated that purchase price as 

follows: $200,000 to land and $45,000 to improvements. (State 

Bd. of Equalization, letter of counsel to a taxpayer, Aug. 2, 2005, 

p. 1 (hereinafter letter of counsel).) At the time of purchase, the 

house was inhabitable but also “run down.” While renovating the 

improvements, the owner encountered problems that caused the 

renovation to become a major remodel. (Letter of counsel, supra, 

at p. 2.) To correct an unrelated error, the county assessor sent 

an appraiser to visit the property, and after that visit, the 

Assessor sent a supplemental assessment notice, dated January 

2005, reflecting that the purchase price of $245,000 had been 

reallocated to $244,000 to land and $1,000 to improvements. 

Upon inquiry, the letter writer was informed that it was 

the assessor’s policy to reallocate most of the purchase price to 

land if a property has been substantially renovated within two 

years of its original purchase, relying on the “rationale that the 

owner bought the property for the land value alone if the 

improvements were torn down within that two-year period.” 

(Letter of counsel, supra, at p. 2.)

8 According to the SBE: “Annotations do not embellish or 

interpret the legal rulings of counsel which they summarize.” (Cal.

Code Regs., tit. 18, § 5700, subd. (a).) 
19

The letter writer asked SBE counsel three questions: 

(1) whether the county assessor’s policy reflects the policy of 

other county assessors or the SBE; (2) what provisions of 

Proposition 13 and/or California Revenue and Taxation Code 

authorize that practice; and (3) what steps can be taken to 

change this policy.

9 (Letter of counsel, supra, at p. 1.) 

As to the first question, SBE counsel stated that while it 

was aware that “other county assessors have also employed this 

practice” of reallocating most of the purchase price to land if a 

substantial renovation occurred within two years, the SBE had 

not weighed in on the practice. Counsel stated, “[T]he [SBE] has 

not issued any policies or guidelines promoting or prohibiting its 

application.” (Letter of counsel, supra, at p. 2.) 

In response to the second question, counsel stated, “We 

believe that this practice is authorized by section 51.5, which 

requires county assessors to correct errors or omissions made in 

the determination of new base[-]year values.” (Letter of counsel, 

supra, at p. 3.) In discussing the situation described by the 

inquiring party, counsel stated the following: “Based on the 

major renovation, the assessor apparently believed that an error 

in value judgment occurred when enrolling the original base[-

]year values for this property. Events subsequent to that change 

in ownership led the assessor to reallocate the land and 

improvement values, changing the base[-]year values for both 

during January 2005 . . . . Since the assessor discovered an 

apparent error in value judgment within the four-year statute of 

limitations prescribed by subdivision (b) of section 51.5, we 

9 Throughout the letter, the name of the county at issue is 

omitted. In the trial court, the Greenspans referred to this policy as 

the “L.A. County method.” 
20

believe that the assessor was required to correct that error.” 

(Ibid.) The SBE later summarized this by stating, “To the extent 

that the original land and improvement value allocation may 

have been an error in value judgment, we believe that section 51.5 

would require its correction.” (Id. at p. 4, italics added.)

As to the letter writer’s third query, SBE counsel stated the 

property owner could appeal the reallocation between land and 

improvements to the Board, alleging the reallocation resulted in 

an amount that was too high for either the land or improvements. 

(Letter of counsel, supra, at pp. 3–4.) This is what the 

Greenspans did in this case. In one appeal, they challenged the 

reallocation from improvements to land, arguing it was contrary 

to statutory law. They challenged the subsequent valuation of 

their completed new construction in a separate board appeal.10 

The letter concluded, “The views expressed in this letter 

are only advisory in nature. They represent the analysis of the 

legal staff of the Board based on present law and the facts set 

10 Specifically, in their application challenging the reallocation 

reflected in the County’s “escape” assessment, the Greenspans checked 

the box indicating they were appealing the “[a]llocation of value of 

property [a]s incorrect (e.g., between land and improvements).” 

To the extent the assessment appeals form contains a specific 

category for allocation between land and improvements, we observe 

that in 1999 in Annotation Number 190.0008, SBE counsel advised 

that “[a] local assessment appeals board has jurisdiction to hear 

supplemental assessment and base[-]year value appeals involving the 

proper allocation of a total property value between land and 

improvements for applications filed within the time limitations periods 

of Revenue and Taxation Code section l605(b) for supplemental 

assessments or Revenue and Taxation Code section 80 for base[-]year 

value appeals.” (Annot., State Bd. of Equalization, Allocation of Value 

(1999).) 
21

forth herein, and are not binding on any person or public entity.” 

(Letter of counsel, supra, at p. 5.)

2. Automatic Reallocation of the Value of Removed 

Improvements to Land

In this case, the Assessor did not deduct the original value 

of the residence from the total value, leaving the original land 

value intact, and then add on the value of the new construction. 

The Assessor automatically reallocated the entire value of the 

improvements voluntarily removed by the Greenspans to the 

base land value from 2014, giving them “credit” for the garage 

left on site. It did so based solely on the fact the Greenspans 

requested their permit to demolish that portion of the structure 

within two years of purchase. This automatic reallocation was 

contrary to sections 51 and 75.10 which, consistent with 

Proposition 13, require that the value of any structure removed 

from real property be deleted from the base-year value. To the 

extent the Assessor relied upon section 51.5, which allows an 

assessor to correct “any error or omission” in base-year value, it 

was not appropriate to do so here.

3. Reliance on Section 51.5

Section 51.5 discusses circumstances under which county 

assessors may correct assessments of base-year value. Section 

51.5(a) provides that errors in the determination of base-year 

value that do not involve the assessor’s judgment shall be 

corrected in the year they are discovered. More pertinent here, 

section 51.5(b) provides, “An error or an omission [in the

determination of a base[-]year value] which involves the exercise 

of an assessor’s judgment as to value may be corrected only if it 
22

is . . . corrected, within four years after July 1 of the assessment 

year for which the base[-]year value was first established.” 

Section 51.5(c) provides that this four-year time limit does not 

apply when the errors or omissions result from taxpayer fraud, 

concealment, misrepresentation, or failure to comply with laws 

concerning the furnishing of information.11 

In enacting section 51.5, the Legislature declared, 

“[F]airness and equity require that county assessors have express 

authority to make corrections to property tax base-year values 

whenever it is discovered that a base-year value does not reflect 

applicable constitutional or statutory valuation standards or the 

base-year value was omitted.” According to the Legislature, 

“[a]ny limitations imposed upon the assessor’s authority to 

correct these errors would result in a system of taxation 

which . . . denies the benefits of Article XIII A of the California 

Constitution [(Proposition 13)] to some taxpayers where the 

barred error or correction would reduce the base-year value.” 

11 The County, in issuing the adjusted property tax bill to the 

Greenspans regarding the reallocation of improvements to land, stated 

the reallocation was for the following reason: “[R]oll bill correction 

[for] escaped ass[essment] per sec[tions] 4821 or 531 R[evenue] & T[ax]

Code.” Section 531 more generally provides: “If any property 

belonging on the local roll has escaped assessment, the assessor shall 

assess the property on discovery at its value on the lien date for the 

year for which it escaped assessment. It shall be subject to the tax rate 

in effect in the year of its escape except as provided in [s]ection 2905 of 

this code.” (§ 531, italics added; cf. Jensen v. Byram (1964) 229 

Cal.App.2d 651, 652 [county could recover taxes as escaped 

assessments, where “land was assessed and taxes were paid, but 

through oversight, there was no assessment of improvements”], 

overruled on other grounds by Bauer-Schweitzer Malting Co. v. City 

and County of San Francisco (1973) 8 Cal.3d 942, 948.) 
23

Further, the Legislature feared that if assessors failed to place 

value on property, allowing it to escape taxation, and they could 

not correct the error, it “would violate the constitutional 

requirement that all property in the state shall be subject to 

taxation.” The Legislature expressly noted, “Nothing in this act 

violates either the spirit or the letter of Article XIII A of the 

California Constitution [(Proposition 13)] since all corrections 

permitted by it must be consistent with applicable constitutional 

and statutory valuation standards.” (Stats. 1987, ch. 537, § 1(a); 

see also Plaza Hollister Ltd. Partnership v. County of San Benito

(1999) 72 Cal.App.4th 1, 17–18 [discussing section 51.5 and 

recognizing legislative statement].) 

Here, in 2014, the Assessor set the Greenspans’

improvements value at $360,000, 40 percent of the total baseyear value. In 2017, the Assessor reallocated $320,000 of that 

value to land based solely on a presumption: The structure

removed had a zero or de minimis value at the time of purchase, 

otherwise the owner would not have removed it within two years. 

There is no contention the Assessor reevaluated or even 

considered what had actually been removed before deeming its 

original assessment a mistake, enabling it to reallocate more of 

the base-year value to land. To permit this automatic 

reallocation to stand would allow the County to circumvent the 

requirements of Proposition 13 (and effectuating statutes) by 

automatically raising the land value after the removal of the

improvement and then tacking on the value of any new 

improvement after construction is complete. 

The County argues that “[t]he Greenspans want credit for 

the value of house that they themselves elected to tear down.” 

That may be true, but that is what sections 51 and 75.10 direct. 
24

The value of any structure—or portion thereof—voluntarily 

removed is deleted, while the portion of the base-year value 

attributable to land is maintained. 

The fact that the Greenspans elected to demolish the 

residence may well have given the assessor cause to consider 

whether it had made a mistake, but it did not establish that a 

mistake had been made. (See generally Carlson v. Assessment 

Appeals Bd. I (1985) 167 Cal.App.3d 1004, 1013 [observing 

subjective value to owner is not an appropriate method of 

assessment]; Wunderlich, supra, 178 Cal.App.4th at p. 689 

[observing the separate assessment of land and improvements 

required by article XII, § 13 of the state Constitution and 

section 607 are rooted in “‘the purpose of equalizing separately 

the assessments on land and on improvements’”].)12 

E. Remand for a New Hearing

In their complaint for refund below, the Greenspans 

requested either “a refund of all excess property taxes paid 

because of the Assessor’s unlawful or improper practice of 

reallocating improvements to land value” or alternatively “an 

order that this matter be remanded to the . . . Board, for 

12 Our opinion does not suggest that an appraiser must always

separately appraise improvements or land. (See AH, supra, § 502: 

Advanced Appraisal, p. 5 [noting real property is generally appraised

as a single unit]; Western States Petroleum Assn. v. Board of 

Equalization (2013) 57 Cal.4th 401, 422 [making general observation, 

in context of regulation addressing declines in market value of 

petroleum refinery property, that land need not be treated as a 

“separate appraisal unit”].) Our discussion is limited to the facts and 

statutes presented. 
25

reconsideration of the escape assessment without taking into 

consideration the Assessor’s reallocation practice.” We agree the 

latter remedy is appropriate here.

The County asserts that during the Board hearing on 

February 22, 2019, it presented “into evidence a sales comparison 

appraisal of the Property to determine that the entire purchase 

price of $900,000 should be allocated to the land.” The County 

argues we should presume the Board relied on this evidence to 

conclude the reallocation “was valid and supported by substantial 

evidence.” We disagree.

At the hearing, the County submitted two pre-construction 

appraisals of the Greenspans’ property prepared the month of the 

hearing (February 2019). One appraisal (labeled “preconstruction”) valued the Greenspan’s property as of 

December 28, 2016, at $936,650 ($900,000 land and $36,650 

improvements) by comparing it to three small-lot vacant-land 

sales. The appraisal stated that “[the] pre-construction [was] 

valued as vacant land due to recent sale prior to demolishing of 

duplex, left workshop and garage.” The second appraisal (labeled 

“Prop. 8”) valued the property as of January 1, 2016, at $886,650 

($850,000 to land and $36,650 to improvements) based on the 

same three vacant-lot comparables.13 Like the other preconstruction appraisal, this appraisal included the notation that 

the “2016 Prop. 8 [was] valued as vacant land due to recent sale 

prior to demolish[ing] of duplex, left workshop and garage.” Both 

appraisals were expressly based upon the premise that the 

property could be appraised as vacant land because the residence 

13 Proposition 8, passed by the voters in 1978, provides for a 

temporary reduction in assessed property value based on a subsequent 

decline in market value. (Fisher, supra, 82 Cal.App.5th at p. 49.)
26

was demolished within two years. Neither appraisal evaluated 

the improvements that existed on the property prior to 

demolition. Neither appraisal addressed the value of the 

property in 2014 when the mistaken assessment allegedly took 

place.14

In its final decision on the allocation appeal, the Board left 

intact the exact figure of $890,559 for the land value challenged 

by the Greenspans in their appeal. This figure corresponds to the 

adjusted property tax bill issued to the Greenspans for the 2016–

2017 roll year, which was admittedly based upon the fact the 

permit to demolish was requested within two years of the date 

the Greenspans purchased the property. As such, there is no 

indication the Board did anything other than deny the allocation 

appeal based on the reallocation conducted by the County 

pursuant to its two-year automatic reallocation policy.

Under these circumstances, we conclude a new hearing on 

the reallocation appeal is the appropriate remedy. (Farr v. 

County of Nevada (2010) 187 Cal.App.4th 669, 685–686 

[determining that appropriate remedy is to remand for new 

hearing under correct burden of proof, noting “[t]he Board is the 

constitutionally designated body entrusted with the duty of 

determining the value of property for the purposes of tax 

14 The County also cites a Multiple Listing Services announcement 

for the Greenspans’ property and argues it was best “characterized as a 

teardown” because it was marketed in part as a “huge lot for future 

building purposes.” However, the listing submitted by the County is 

from a 2008 sale of the property, six years before the Greenspans 

purchased it, states the property is a 2,476-square-foot home with four 

bedrooms and two baths and adds: “Huge possibilities for this 

property, single family, income or future building site for that 

incredible estate home.”
27

assessment”].) In reconsidering the Greenspans’ reallocation 

appeal, however, the Board must recognize the County’s 

automatic reallocation of removed improvements to land is 

contrary to law. To the extent the County argues the originalland and improvement-value allocation was an error in judgment, 

an error should be shown.15 We otherwise express no opinion on 

the merits of any such appeal. (Id. at pp. 685–686; cf. GeorgiaPacific Corp. v. County of Butte (1974) 37 Cal.App.3d 461, 477–

478.) 

15 We note the County also argues that under Property Tax rule 

321, the taxpayer has the burden of proving the property was 

improperly assessed. However, Rule 321 states that in any hearing 

involving an escape assessment, the presumption affecting the burden 

of proof is in favor of an applicant. (Cal. Code Regs., tit. 18, § 321, 

subd. (d); see also Fisher, supra, 82 Cal.App.5th at p. 60.) An “escape 

assessment” includes a correction of a base-year value under 

section 51.5, such as the assessment that the Greenspans appealed 

here. (Sunrise Retirement Villa v. Dear (1997) 58 Cal.App.4th 948, 

956–957; see also Prang v. Los Angeles County Assessment Appeals Bd. 

No. 2 (2020) 54 Cal.App.5th 1, 14–17.)
28

DISPOSITION

The judgment of the trial court is reversed. The trial court 

is directed to enter a new judgment vacating the decision of the 

Board and remanding the matter to the assessment appeals 

board for a new hearing. Appellants are awarded their costs on 

appeal.

MORI, J.

We concur:

COLLINS, Acting P. J.

ZUKIN, J.