California Property Tax

California property owners have suffered the most with real estate value drops over the last few years. Due to larger home prices a $300,000 value drop is not at all uncommon. What this means to your property tax? The lower your taxable value, the lower your tax bill. Pay no more than you need to, know your rights.

You may have seen a drop in taxes from your local government, does this reflect your actual market value? You have the right to appeal your property tax assessment. And more than ever assessors are looking for profesional valuation advice. Get your facts straight and provide evidence to support your claim. Our featured real estate professionals in your county are a great resource for such data.

Proposition 8, California property owners whose assessed value is greater than the current market value can save money by lowering their assessment value, thus lowering their tax bill. Chances are if you bought property within the past few years the purchase price was used as the assessed value and if market values have dropped in your area, you can likely see a reduction. It is reccomended to contact one of our county representatives to assist with the valuation of your property before seeking a reduction in tax.

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. 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.

A large contributor to Proposition 13 was the sentiment that older Californians should not be priced out of their homes through high taxes. 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. 

 
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.

The regular appeals filing period will usually begin on July 2, in each county and will end either on September 15 or November 30, for most counties in California.