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Lower CA Property Taxes
Property Tax Little Black Book, LLC is not a law firm. Valerie Faltas and/or the employees of Property Tax Little Black Book, LLC are not acting as attorneys. The information contained in Property Tax Little Black Book and the Inherited Property and Exemptions Guide or Property Tax Little Black Book is not a substitute for the advice of an attorney. Neither Valerie Faltas nor Property Tax Little Black Book can provide legal advice.
Valerie Faltas and Property Tax Little Black Book, LLC only provide a very general understanding of the law as it relates to property taxes. Although Valerie Faltas and Property Tax Little Black Book, LLC take every reasonable effort to ensure that the information on our book and our website are up-to-date and legally sufficient, the legal information on the book and on the website is not legal advice and is not guaranteed to be correct, complete or up-to-date. Because the law changes rapidly, is different from jurisdiction to jurisdiction, and is also subject to varying interpretations by different courts and certain government and administrative bodies, neither Valerie Faltas nor Property Tax Little Black Book, LLC can guarantee that all the information on the book or website is completely current.
Discover how to Lower
Your Property Taxes year after year
for as long as you own your home!
By Valerie Faltas, Property Tax Expert
Prop 13 does apply today to all property owners in California. Prop 13 was enacted in 1978 to control the amount of property taxes paid by taxpayers. Prior to prop 13 there was no limit on property taxes. The assessed value was based on the changing market value every year and because the market values increased significantly over time in California, the amount of property taxes increased significantly. As the values of the homes increased over time, older folks were being driven out of their homes unable to pay the increases. Prop 13 was established to assist those on fixed incomes who could not adjust to the increasing property taxes. This amendment came about as a result of a ballot initiative passed by voters in June of 1978, called “People's Initiative to Limit Property Taxation.” Prop 13 is an amendment to the California Constitution and is highly controversial because of its limiting nature and the imbalance it has created in terms of how much each homeowner pays. Homeowners who purchased many years ago don’t pay nearly as much in property taxes as those who have purchased more recently and as a result of this fact many tax payers think Prop 13 is unfair and should be revoked.
Prop 13 applies to all who own property in California even those who have purchased recently. What Prop 13 did and still does today is establish a cap on the amount of property taxes the government can charge you. The initial purchase price of your property, as long it was a market transaction, becomes your base value. A market transaction means that as long as your purchase price was market value. If you paid well below market value for your home the Assessor will assess you at market value because that is what Prop 13 states. Your assessment is based on market value as of the re-assessable event and if your purchase price was market value the Assessor will accept it as market value. If not, the Assessor will determine a value for you.
Generally, most Californians pay about 1.25% of their assessed value in actual property taxes per year. The difference between your base value and your assessed value is very simple. Your base value is the value established as of the date of a re-assessable event, often this is when you initially purchased your property. The assessed value is the value you pay taxes on for a designated year since all base values have a 0-2% increase per year based on Prop 13. So your base value is the value your property taxes are based on and then it will increase slightly every year. Generally, most Californians pay about 1.25% of their assessed value in actual property taxes per year. So as your base value trends every year raising your assessed value year to year, accordingly what you pay in property taxes goes up also. Even though your property taxes do increase some every year it is limited and is ultimately tied to your base value. So even if the market sky rockets and your value increases substantially, your property tax base won’t increase along with the market it is limited to the 2% trend based on Prop 13.
Check out our FREE California ebook which explains Prop 13 in more depth with examples! Feel free to contact me with any questions you may have!
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