California Property Tax & Prop 13 Explained
Understand how property taxes work in California, how Proposition 13 affects your assessment, and what to expect as a home buyer.
What Is Proposition 13?
Proposition 13 is the foundation of California's property tax system. It establishes that the base property tax rate is capped at 1% of a property's assessed value, and the assessed value can increase by no more than 2% per year while you own the home.
Note: This is for educational purposes only and does not constitute tax advice. Verify rates with your county assessor.
Key Things to Know
Base Rate: 1% of Value
California's base rate is 1%. Voter-approved bonds and local assessments make the effective rate higher in most Bay Area communities.
Annual Cap: 2% Max
Under Prop 13, your assessed value can only increase by 2% per year while you own the home, protecting you from large jumps.
Reassessment on Sale
When you purchase a home, the county reassesses it at your purchase price. This becomes the new base assessed value.
Supplemental Bills
After closing, you'll receive a one-time bill covering the difference between the prior assessment and your purchase price.
How It Works After You Buy
Reassessment
The county resets your assessed value to your purchase price on the closing date.
Annual Bill
Taxes are paid in two installments: November 1 and February 1.
Frequently Asked Questions
What is Proposition 13?
Proposition 13 is a California constitutional amendment that limits property tax to 1% of a property's assessed value and caps annual assessment increases to 2% per year for as long as the property is not sold.
How is my property tax calculated?
Your base property tax is 1% of the assessed value. Local voter-approved bonds and special assessments are added on top, which is why effective tax rates are often 1.1% to 1.3%.
When does my property get reassessed?
Your property is reassessed to full market value (your purchase price) when it changes ownership or when significant new construction is completed.
Questions About Property Taxes?
Buying in the Bay Area?
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