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California Property Taxes and Proposition 13

By
Real Estate Agent with HomeSmart, Evergreen Realty

Property tax law in California is set forth in the state constitution.  Determination of property taxes is based around Proposition 13, a 1978 voter initiative that took the power of setting the property tax rates away from state legislators.

California property taxes

Proposition 13

California property taxes are "ad valorem" and determined on amount and proportional to property values.  If home values go up, assessed values and property taxes go up.  As California property values climbed during the 1970s, voters approved Proposition 13, which froze the basic tax rate and limited the assessed value of property to the value at sale plus no more than 2 percent increase per year.


Calculating Property Taxes

Property taxes in California are determined by multiplying a tax rate by an assessed property value.  Proposition 13 defines the rate as 1 percent plus of assessed value - rate necessary to repay bond obligations for school facilities approved by 55 percent of voters and for other bond obligations approved by two-thirds of voters.  Such bonds can be issued by the state, counties and other local districts, so tax rates vary between areas and counties California. 


Exemptions

California allows certain exemptions from property taxes.  Each homeowner is allowed an exemption that subtracts $7,000 from the assessed value of the home before it is multiplied by the tax rate.  This "homeowners exemption" should be carried over automatically year to year.  Other possible exemptions, such as for veterans, schools and churches, are available.


Due Date and Tax Year

Property tax year in California runs from July 1 through June 30.  Taxpayers must pay their property tax bill in two installments:  the first by December 10, and the second by April 10.  An overdue tax bill results in a penalty of 10 percent plus a 1.5 percent a month redemption fee based off the amount owed. 

When Property Taxes Remain Unpaid

If the property tax remains unpaid for five years, California law permits the local tax collector to go through a process of selling the property so as to collect on the past-due taxes and penalties. 

 

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Harrison K. Long – REALTOR® and broker associate, GRI – Coldwell Banker Residential Brokerage– 949-854-7747 (phone) – ExploreProperties@gmail.com  -  CA DRE 01410855 – SFR short sale and foreclosure resource certified by the National Association of REALTORs® – now serving as an appointed director at California Association of REALTORs®

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This is for information only and is not the providing of legal or tax services.  If you have questions about your California property taxes, you should contact the tax assessor or tax collector office at your county.  

Professional REALTOR® agent representation - help for property owners, private trust estate representatives, estate administrators, executors and heirs, probate and trust attorneys, estate planners, income tax professionals, public guardians, fiduciaries, investor group managers, bankers, and individuals, with listing and sale of properties at Orange County, CA.

Harrison K. Long, Attorney member of the California State Bar Association #69137   

Posted by

 

Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance
Harrison, thank you or your post. Lawmakers must remember who they Work for and the passage of Prop 13 in 1978 was a bell weather moment. Unfortunately, the lawmakers forgot the other end of the equation, that is, you don't spend what you don't have. Using bonds is short-sighted and unfair to everyone by 'sweeping' tough decisions under the carpet for future legislators to tackle.
Apr 01, 2013 09:41 PM
Harrison K. Long
HomeSmart, Evergreen Realty - Irvine, CA
REALTOR , GRI, Broker associate, Attorney

Norman ... You are correct that lawmakers in California forgot that they need to curtail and stop the over the budget spending.  They need to stop promising to fuind public employee pensions when the money is not available.  

Apr 02, 2013 10:36 AM
Laura Allen, Lake Tahoe - Truckee Real Estate for Sale TahoeLauraRealEstate.com
Coldwell Banker Realty, Tahoe City, CA (530) 414-1260 - Tahoe City, CA
Tahoe Real Estate Agent Helping Buyers and Sellers

Harrison - You've done an excellent job of explaining Prop 13 and how property taxes works in the state of California. 

Apr 02, 2013 01:05 PM
Harrison K. Long
HomeSmart, Evergreen Realty - Irvine, CA
REALTOR , GRI, Broker associate, Attorney

Laura ... Thanks for your support, and it's important for us all to understand CA property taxes and articulate that for our friends and clients.  Best wishes.

Apr 02, 2013 01:19 PM