California Property Tax Guide 2025

Thanks to Proposition 13, California has relatively low property tax rates — about 0.71% on average. But with the state's high home values, the average homeowner still pays around $5,900/year. Understanding Prop 13 is the key to understanding California property taxes.

How Prop 13 Works

Passed in 1978, Proposition 13 fundamentally changed California property taxes with three key rules:

1. 1% base rate cap: The base property tax rate cannot exceed 1% of assessed value (local voter-approved bonds can add 0.1-0.5% more).
2. 2% annual increase cap: Assessed value can only increase by a maximum of 2% per year, regardless of market appreciation.
3. Reassessment on sale: When a property changes ownership, it's reassessed to current market value — this is the "reset."

This means a homeowner who bought in 1990 for $200,000 might have an assessed value of ~$400,000 today (2% annual increases), even if the market value is $1.5 million. Their neighbor who bought recently at $1.5M pays taxes on that full amount.

Average Effective Rates by County

Proposition 19 — Inheritance Rules Changed

Prop 19 (effective February 2021) significantly changed how property tax benefits transfer between generations:

• Parent-child transfers: You can still inherit a parent's low tax basis, BUT only if you use the home as your primary residence AND only up to $1 million above the current assessed value.
• No more investment property transfers: Before Prop 19, children could inherit rental/investment properties and keep the parent's low assessment. This is no longer possible.
• Portable tax base for 55+: Homeowners 55+ (or disabled/disaster victims) can transfer their tax basis to a new home anywhere in California, up to 3 times.

Key Exemptions

• Homeowners' Exemption: $7,000 off assessed value (saves ~$70/year). Must be owner-occupied primary residence. File once with your county assessor.
• Veterans' Exemption: $4,000 off assessed value. Cannot be combined with Homeowners' Exemption (take whichever is larger).
• Disabled Veterans' Exemption: $161,083-$241,627 off assessed value (2024) for veterans with 100% disability and income under $76,761.
• Senior Citizens' Property Tax Postponement: 65+ with household income under $49,017 can defer property taxes until sale. State pays your taxes as a lien.
• Property Tax Assistance (PTA): Refund of up to $1,000 for qualifying seniors and disabled persons.

How to Appeal Your Assessment

1. Review your assessment notice — Mailed by August 1. Check the assessed value and any changes.
2. Request an informal review — Contact your county assessor's office first. Many disputes are resolved at this stage.
3. File Assessment Appeal Application — File with the Clerk of the Board within 60 days of the notice (or September 15 – November 30 for regular roll).
4. Attend the hearing — Present evidence: comparable sales, property condition, income approach for rental properties.
5. Prop 8 temporary reduction — If market value drops below your Prop 13 assessed value, you can request a temporary reassessment to current market value. This resets back as the market recovers.

Supplemental Tax Bills

Unique to California: when you buy a property or complete new construction, you'll receive a supplemental tax bill for the difference between the old and new assessed value, prorated for the remaining tax year. This is in addition to your regular annual bill.

Many new homeowners are surprised by these — they can be significant. Budget for 1-2 supplemental bills in your first year of ownership.

Important Dates

• January 1: Lien date — property values and ownership determined as of this date
• February 15: Deadline to file exemption claims (new owners)
• July – August: Assessment notices mailed
• September 15 – November 30: Regular filing period for assessment appeals
• November 1: First installment due
• December 10: First installment delinquent
• February 1: Second installment due
• April 10: Second installment delinquent