Review of California Proposition 13

In this article, I am going to do a review of California Proposition 13, voted into California’s Constitution in 1978.

Proposition 13 limits property taxes to 1% of the property’s assessed value, at the time of purchase, plus an inflation factor determined by California’s consumer price index (CPI).

Add to that, local fees, like fees for parks, schools etc. that can add up to another .25% and higher.

The property’s assessed value may increase a maximum 2% each year, to compensate for annual inflation.

Review of California Proposition 13

It may change upon a reassessment by the county assessor.

A reassessment only occurs upon transfer of title.

Also, any improvement made to the property like adding a room, pool etc., will increase the taxes on the property

The next year, the tax assessor raises the value 2% as allowed by Prop 13, plus the improvement value of the improvement.

So, if the improvement was value at $50,000, then next year the tax assessor will raise the value of the base vale by $50,000 and set as the new value and can

increase the new valve by 2% as allow for by Proposition 13.

Example, base valve after several years, which had been increasing 2% a year, is now $500,000.

You decide to add a pool and the value of the pool is $50,000, the new value is now $550,000, and you will tax at 2% of $550,000 or your next year tax will be $561,000 and the year after that will be $572,000 etc.

If the property is sold, the new base valve will be the base on what the property sold for.

This is a valve quick review of California Proposition 13

Steve Olmos
Selling real estate in California since 1980

Steve Olmos: www.steveolmos.com
Homequest Real Estate

Diana Olmos: www.mortgagemarketingmentor.com
Statewide funding Inc.