Here is something you should know about Proposition 13 before sending in your ballot.
Proposition 13 was passed by California voters in 1978. The purpose of the proposition was to reduce property tax rates on homes, businesses and farms. Prior to the property tax reform, there were no caps and no limits on increases per year. According to California Tax Data the average rate was just under 3% of the market value.Â
Under Proposition 13 tax reform limits are set capping no more than 2% per year. If the property is sold the property is reassessed and new taxes are based on approximately 1-1.2% of the sales price and a cap of 2% yearly thereafter. This helps many homeowners plan for the future knowing what to expect on their tax bill. As for our parents or grandparents that purchased their home in 1976, Proposition 13 has helped many stay in their homes. The increases have not exceeded 2% per year of the value of their home of 1976. . Without this bill their taxes would be substantially higher and in many instances causing them to have no choice but to sell their homes.Â
Whether you purchased your home yesterday or in 1978 you are protected under Proposition 13. Your property taxes cannot increase more than 2% per year. If you sell your home the property is reassessed at the sales price. The rate will be between 1-1.2% of the reassessed value. If during your ownership the value of your property drops there is an appeal process in place to lower your taxes based on the lower value. This appeal is done through the county assessor's office.Â
If you would like to know more about Proposition 13 and how your property tax funds are allocated send us a message.
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