Introduction
California homeowners have long enjoyed stable and predictable property taxes thanks to Proposition 13, a landmark law passed in 1978. If you’re a property owner in California—or plan to become one—understanding how Prop 13 works can save you money and stress in 2025 and beyond.
What Is Proposition 13?
Applicable Code: California Revenue & Taxation Code §§ 50–100
Proposition 13 (Prop 13) is a constitutional amendment that limits property tax increases by:
- Capping the base tax rate at 1% of assessed value
- Restricting annual increases of assessed value to 2% unless there’s a reassessment
- Freezing assessed value at purchase price, subject to limited inflation adjustments
How Prop 13 Limits Property Taxes
Under Prop 13:
- Your base year value is the purchase price of your property
- Assessed value can only increase by 2% per year, regardless of market value changes
- Your property tax bill remains stable, even as home prices rise rapidly
Who Benefits from Prop 13?
- Long-term homeowners: The longer you own, the greater the savings
- Retirees & fixed-income homeowners: Keeps taxes affordable
- Inherited properties: May retain the original assessed value (if structured properly under Prop 19)
- Landlords & businesses: Benefit from stable assessments
How Prop 13 Affects New Homeowners
When you buy a new home, your assessed value is reset to the purchase price. From there, your property taxes are limited to 1% of that value + any voter-approved local taxes.
Example:
If you buy a home for $700,000 in 2024, your base property tax in 2025 = $7,000, and the assessed value can only increase 2% per year, even if the market value goes up 10%.
Prop 13 vs. Reassessment Triggers
Reassessment occurs when:
- You buy or transfer property
- You add new construction or improvements
- There’s a change in ownership interest
No reassessment for:
- Transfers between spouses or registered domestic partners
- Certain parent-to-child transfers (limited under Prop 19)
Prop 13 and Proposition 19
Prop 19 (effective 2021) allows:
- Homeowners over 55, disabled, or wildfire victims to transfer their Prop 13 tax base up to 3 times statewide
- Limits parent-to-child transfers to only primary residences, with a cap of $1 million assessed value exclusion
Step-by-Step Guide to Check Your Tax Base
Step 1: Visit your County Assessor’s website
Step 2: Search your parcel or property by address or APN
Step 3: Review your base year value
Step 4: Calculate 1% of your assessed value
Step 5: Add any local voter-approved taxes to find your total property tax bill
Conclusion
Proposition 13 remains a powerful tool for keeping California property taxes predictable and manageable. Whether you’re a homeowner, senior, or planning to transfer property to family, understanding Prop 13’s benefits—and its interaction with Prop 19—can save you thousands over the years.
Call to Action
Have questions about your property tax base or potential reassessments under Prop 13 or Prop 19?
Schedule a meeting with Anshul Goyal, CPA EA FCA, a U.S.-licensed Certified Public Accountant and IRS Enrolled Agent. He specializes in California property tax compliance, inheritance planning, and real estate tax strategy.
📅 Book your appointment here
FAQs – Prop 13 Property Tax Questions
Q1: Can my property taxes go up more than 2% in one year?
No, unless there’s a change in ownership or new construction.
Q2: Does Prop 13 apply to rental properties?
Yes. It applies to all real property, including residential, commercial, and rental units.
Q3: How do I transfer my tax base if I’m over 55?
Use BOE-19-B to transfer your assessed value under Prop 19 when buying a new primary residence.
Q4: Do inherited properties qualify for Prop 13 protections?
Only if they meet Prop 19 rules—must be a primary residence with a capped exemption.
Q5: How do I know if my assessed value is correct?
Check with your County Assessor’s office or review your property tax statement.
About Our CPA
Anshul Goyal, CPA EA FCA is a U.S.-licensed Certified Public Accountant, IRS Enrolled Agent, and Fellow Chartered Accountant. With more than 15 years of experience and over $200M in tax savings, Anshul helps California homeowners, investors, and families navigate complex property tax rules, including Prop 13 and Prop 19 planning.
Disclaimer
This article is intended for informational purposes only and does not constitute legal or tax advice. Property tax laws in California may change and vary by county. Please consult a certified CPA or legal professional to assess your specific property tax situation.