CALIFORNIA PROPOSITION 13
California Proposition 13 is a California Constitutional amendment enacted in 1978. The Proposition 13 California Amendment limits the tax rate increase that can be charged annually on real estate in California. The proposition decreased property taxes by assessing property values at their 1975 value and restricted annual increases of assessed value of real property to an inflation factor, not to exceed 2% per year. California Proposition 13 also prohibited reassessment of a new real estate property tax base year value except for in cases of either change in ownership, or completion of new construction. California would later pass Proposition 58 and Proposition 193 which in some cases permits the low Proposition 13 tax base to be passed to an heir or member of a trust.
From theCalifornia Board of Equalization Website:
“This amendment to California’s Constitution was the taxpayers’ collective response to dramatic increases in property taxes and a growing state revenue surplus of nearly $5 billion. Proposition 13 rolled back most local real property, or real estate, assessments to 1975 market value levels, limited the property tax rate to 1 percent plus the rate necessary to fund local voter-approved bonded indebtedness, and limited future property tax increases.
After Proposition 13, county property tax revenues dropped from $10.3 billion in 1977-78 to $5.04 billion in 1978-79.”
The California Board of Equalization report goes on to say “Prior to 1978, real property was appraised cyclically, with no more than a five-year interval between reassessments. Since property values were systematically reviewed and updated, assessed values were usually kept at or near current market value levels. In contrast, under Proposition 13, properties are reassessed to current market value only upon a change in ownership or completion of new construction (called the base year value). ”
You can find additional details on Proposition 13 here.
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