California Property Tax

Property Tax Experts

For taxpayers who may be experiencing difficulty in paying their property taxes,
there may be help. Most cities in the United States have Property Tax Poverty
Exemption Policy and Guidelines. You may be eligible to waive your annual property
tax for one year read more

Proposition 13, officially titled the "People's Initiative to Limit Property Taxation," was a
ballot initiative to amend the constitution of the state of California. The initiative was
enacted by the voters of California on June 6, 1978. It would eventually be upheld as
constitutional by the United States Supreme Court in the case of Nordlinger v. Hahn,
505 U.S. 1 (1992). Proposition 13 is embodied in Article 13A of the California
Constitution.

The most significant portion of the act is the first paragraph, which capped real estate
taxes:

“ SECTION 1. 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 one percent (1%)
tax to be collected by the counties and apportioned according to law to the districts
within the counties. ”

The proposition's passage resulted in a cap on property tax rates in the state, reducing
them by an average of 57%. In addition to lowering property taxes, the initiative also
contained language requiring a two-thirds majority in both legislative houses for future
increases in all state tax rates or amounts of revenue collected, including income tax
rates. Proposition 13 received an enormous amount of publicity, not only in California,
but throughout the United States.[1] Passage of the initiative presaged a "taxpayer
revolt" throughout the country that is sometimes thought to have contributed to the
election of Ronald Reagan to the presidency in 1980. However, of 30 anti-tax ballot
measures that year, only 13 passed.[2]

A large contributor to Proposition 13 was the sentiment that older Californians should
not be priced out of their homes through high taxes.[3] The proposition has been called
the "third rail" (untouchable subject) of California politics and it is not politically popular
for Sacramento lawmakers to attempt to change it.[3]

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In the 2003 California recall election in which Arnold Schwarzenegger was elected
governor, his advisor Warren Buffett suggested that Proposition 13 be repealed or
changed as a method of balancing the state's budget. Schwarzenegger, believing that
taking such a step would be to touch a political third rail that could end his
gubernatorial career, said, "I told Warren that if he mentions Proposition 13 again he
has to do 500 sit-ups." A 2004 Los Angeles Times Magazine cover story that detailed
the proposition's damaging effects and advocated its repeal drew heavy criticism from
its supporters.