Proposition 13

Proposition 13 is the 1978 California constitutional amendment that caps the general property tax rate at 1% of a home's assessed value and limits how fast that assessed value can rise to no more than 2% per year. A home is only reset to full market value when it changes ownership or undergoes new construction.

Why it matters to a homeowner

Prop 13 is the reason your tax bill is tied to what you paid for your home, not what it would sell for today. As long as you keep the property, your assessment grows slowly and predictably. The catch is that two nearly identical houses on the same street can owe very different taxes simply because they were bought in different years.

A concrete example

Suppose you bought a home and the county set your assessed value at $600,000. Under Prop 13, that figure can rise by at most 2% the following year, to about $612,000, regardless of how hot the local market gets. Your general tax is roughly 1% of that assessed value, plus any local voter-approved bonds and fees.

How it affects your assessment or appeal

Prop 13 sets the ceiling, but it does not guarantee you are taxed fairly in a down market. If your home's current market value drops below your protected assessment, Proposition 8 lets the county temporarily lower it. An appeal is how you ask for that reduction when the assessor has not made it on their own. Knowing your base-year value is the starting point for any appeal.

For the official rules, see the California State Board of Equalization's California Property Tax overview (Publication 29).

Related

• How to appeal your property tax
• What is an over-assessment
• Proposition 8 (Decline-in-Value)
• Base-Year Value
• Lien Date
• Check your assessment