A Review of Property Taxes

Property taxes change only when the value of the property is reassessed by the county. Reassessment typically occurs when a home is sold or the owner makes significant improvements. If your house or business is in a redevelopment district and improvements are made within the district, but not specifically to your property, the property tax you pay will not change. However, your property taxes will increase if your house or business has been significantly rehabilitated through a redevelopment project.

Proposition 13 was approved by Californians in 1978 as the formula for establishing property taxes. Under Proposition 13 property taxes are approximately one percent of the market value of the property. Proposition 13 requires that the assessed value of property be based on its market value at the time the property is sold. County assessors reassess property under the following circumstances:

Annual reassessment — the assessor can increase the assessed value up to two percent each year during which the property remains in the same ownership to reflect growth in market value.
Partial reassessment — the assessor can add the value of new improvements or rehabilitation of the property.
Complete reassessment — the assessor resets the assessed value to the current market value when title in the property is sold or transferred.

For example, if your property has an assessed value of $100,000 today, the taxes you pay on that property may not exceed one percent ($1,000) per year plus the amount of any voter-approved special taxes. Each year the assessed value of the property can increase by no more than two percent over the previous year. Thus, next year the assessed value cannot exceed $102,000, and the taxes (at one percent) would not exceed $1,020.