California Proposition 13 (Property Tax Cap)

Summary

Proposition 13 strictly limits property taxes in California to 1% of the property's assessed value at the time of purchase and caps annual increases in that assessed value at a maximum of 2%.

Rights & Rules

01.
Your base property tax rate cannot exceed 1% of the home's purchase price (plus some local voter-approved bonds).
02.
As long as you own the home, the county cannot increase its assessed value (and thus your tax bill) by more than 2% per year, no matter how much the real estate market skyrockets.
03.
The assessed value only resets to current market value when you sell the property or do major new construction.
04.
You can transfer this low tax base to a new home if you are over 55, severely disabled, or a victim of a natural disaster (expanded under Prop 19).

Penalties

01.
Failure to pay property taxes will result in a 10% penalty on the unpaid amount, and after 5 years of delinquency, the county can sell your home at a tax auction.

Verified Citations

California Constitution Article XIII A (Proposition 13)

Source

"The maximum amount of any ad valorem tax on real property shall not exceed One percent (1%) of the full cash value of such property. The full cash value base may reflect from year to year the inflationary rate not to exceed 2 percent for any given year..."