How Property Assessment Works Under Proposition 13 The cornerstone of California property taxation is the concept of assessed value, which is initially set at the full cash price of the property when it is purchased or newly constructed. Component Description Typical Rate or Cap General Tax Levy Funds basic local government services 1% of assessed value Voter-Approved Indebtedness Repays bonds for infrastructure and schools Varies by district Direct Assessments For specific local improvements (e.
How California Property Tax Rates Are Determined and Applied
This value becomes the baseline for taxation, and Proposition 13 limits the annual increase of this assessed value to a maximum of 2 percent per year, as long as the ownership remains unchanged. There are, however, specific exclusions available that can mitigate this increase.
The remaining amount needed to fund local services comes from voter-approved debt obligations and special assessments for specific districts, such as schools, community colleges, and various municipal improvement projects. Additionally, homeowners who are 55 years of age or older, disabled, or victims of natural disasters may be eligible for the Homeowners' Exclusion, which allows them to transfer their low base year value to a replacement home within the same county.
How Property Tax Rates Are Determined and Applied
The first bill, covering the period from July 1 to December 31, is typically due on November 1 and becomes delinquent after December 10. These staggered payments are tied to the fiscal calendar used by most local governments and are designed to spread the revenue stream throughout the year, although the amounts can vary significantly between the two periods based on the timing of the fiscal year.
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