If you leave a comment, Jim will visit your blog and leave a comment.I often get asked how property taxes work here in California,
and although it's convoluted in one sense, it's actually pretty straightforward in another since 1978, when Proposition 13 was passed to bring property taxes under control after a period of skyrocketing prices like we saw in the early 2000s.

I know that each jurisdiction has a little flexibility, so I'm going to work with the maximum that is allowed under Proposition 13.

Let's assume that you bought a house last year and closed escrow on December 31, 2008, so we won't have to do any prorations for part of a year. Then let's assume that you paid $300,000 for that house. Your taxes for the first year, 2009, will be two percent of your purchase price of $300,000, or $6,000. In each of the following years, the preceding year's tax is simply increased by two percent.

The value of your home makes no difference, which is good when home values increase astronomically as we saw in the early 2000s. If the value of your home ever decreases, or doesn't increase much, it's probably worth your while to contest your property tax so that your home is revalued and your taxes are lowered.

So here are your taxes for the next ten years, rounded off to whole numbers:

  • 2009 - $300,000 x .02 = $6,000
  • 2010 - $6,000 x 1.02 = $6,120
  • 2011 - $6,120 x 1.02 = $6,242
  • 2012 - $6,242 x 1.02 = $6,367
  • 2013 - $6,367 x 1.02 = $6,495
  • 2014 - $6,495 x 1.02 = $6,624
  • 2015 - $6,624 x 1.02 = $6,757
  • 2016 - $6,757 x 1.02 = $6,892
  • 2017 - $6,892 x 1.02 = $7,030
  • 2018 - $7,030 x 1.02 = $7,171

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9 Comments on How San Diego County property taxes work

MAY
02
2009
454,014 Points 15 Featured Posts Called Shot Master

Jim, that is very interesting. I don't think I ever heard of taxes being done in quite that way.
1:11am • #1
1,056,534 Points 27 Featured Posts Outside Blog Called Shot Master

Hey, Maria.

Welcome to California!

Previous to Proposition 13, though, different counties could charge different rates based on the home's value, which was causing retirees to have to sell their homes to pay the taxes.
1:22am • #2
204,202 Points 1 Featured Post

Hey Jim, we need some serious Propositions back here in the northeast.  My taxes have doubled in 9 years.
6:21am • #3
405,395 Points 6 Featured Posts Localism Sponsor Outside Blog

Dear Jim,

This is great information for First Time Home buyers that may not know how property taxes work in California. Thanks for putting this valuable info out there where people can find it. Have a great and productive spring!

Betina
8:35am • #4
319,021 Points 2 Featured Posts Localism Sponsor

Hi Jim: That was neat thanks for the info - very different than here in CT.

:)
12:09pm • #5
1,056,534 Points 27 Featured Posts Outside Blog Called Shot Master

Hey, Kevin.

Start writing.
8:59pm • #6
1,056,534 Points 27 Featured Posts Outside Blog Called Shot Master

Hey, Betina.

I think thereare a lot of people out here who don't understand how property taxes work, especially if the home was purchased before 1978. I'll have to do another blog on that. Hmmm. Maybe tonight.
9:00pm • #7
1,056,534 Points 27 Featured Posts Outside Blog Called Shot Master

Hey, Matt.

Now look at those figures and pretend that in ten years the home has appreciated to $600,000. If one did the taxes on the valuation, the tax would be $12,000, yet it's only $7,171 under the Proposition 13 method, a significantly savings. Of course, the lack of tax revenue hurts our public services because that's where they get most of their money. So we are kind of dependent on a good real estate market so that when things sell, the tax base gets updated.
9:03pm • #8
NOV
14
2011

Just stopping by to make sure that we have all of the photographs from your older blog posts in our photograph collection.
7:24pm • #9


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