Property Taxes in California: Rates, Exemptions, and How They Work (2026)
TL;DR
California property taxes are governed by Proposition 13, which caps the base tax rate at 1% of assessed value and limits annual assessment increases to 2%. Your assessed value is set when you buy the property (or when it was last sold) and can only increase by up to 2% per year. When you sell, the new buyer's assessed value resets to the purchase price. The average effective rate is about 0.71%. Supplemental tax bills are triggered by ownership changes and new construction. You can appeal through the Assessment Appeals Board within strict deadlines.
Proposition 13: The Foundation
Everything about California property taxes flows from Proposition 13, passed by voters in 1978. The key rules:
- Base property tax rate is capped at 1% of assessed value
- Assessed value is set at fair market value at the time of purchase or new construction
- Annual assessment increases are limited to a maximum of 2% (the California CPI, if lower)
- Voter-approved bonds and special assessments are added on top of the 1% base rate
- Reassessment to current market value occurs only on a change in ownership or new construction
In practice, the total tax rate including bonds and special assessments typically runs 1.1-1.5% of assessed value, depending on the area.
How Your Assessed Value Is Set
When you buy a home in California, the county assessor sets your assessed value (called the "base year value") at the purchase price. From that point forward, the assessed value can increase by no more than 2% per year, regardless of how much the market moves.
Example: A home purchased in 2010 for $400,000 would have a maximum assessed value of about $535,000 by 2026 (2% compounding over 16 years), even if the market value is $900,000.
Proposition 19
Passed in 2020, Proposition 19 made two significant changes:
Base Year Value Transfers
Homeowners 55+, disabled persons, and disaster victims can transfer their Prop 13 base year value to a replacement home anywhere in California, up to 3 times. If the new home costs more, the difference is added to the transferred base year value.
Parent-to-Child Exclusions (Restricted)
Before Prop 19, parents could transfer property to children without reassessment (primary residence plus $1 million in other property). Now, the exclusion only applies to a primary residence, only if the child uses it as their primary residence, and only up to $1 million above the current assessed value.
Supplemental Tax Bills
California is unique in issuing supplemental tax bills when a property changes ownership or new construction is completed. The supplemental bill covers the difference between the old and new assessed value for the remaining portion of the fiscal year.
These bills are separate from your regular annual tax bill and are easy to miss. They are not included in your mortgage escrow unless you notify your lender.
Exemptions
| Exemption | Amount | Who Qualifies |
|---|---|---|
| Homeowners' Exemption | $7,000 off assessed value | Owner-occupied primary residence |
| Disabled Veterans' Exemption | $161,083-$241,627 (adjusted annually) | Veterans with 100% disability or low income |
| Senior Citizen Property Tax Postponement | Defers taxes until sale | Homeowners 62+ with household income under ~$49,000 |
California's homeowners' exemption is modest compared to other states. At $7,000 off the assessed value (not the tax), it saves about $70 per year at the 1% base rate. But it is free money, so apply for it.
Payment Schedule
California property taxes are paid in two installments:
- First installment: Due November 1, delinquent after December 10. 10% penalty if late.
- Second installment: Due February 1, delinquent after April 10. 10% penalty plus $10-$35 cost fee if late.
Mello-Roos and Special Assessments
Many California properties, especially in newer developments, are subject to Mello-Roos Community Facilities District taxes. These are voter-approved taxes that fund infrastructure (roads, schools, parks, water systems) in the district. Mello-Roos taxes are fixed amounts, not based on assessed value, and they appear on your tax bill as a separate line item.
Mello-Roos taxes can add $1,000-$5,000+ per year on top of your regular property tax. They cannot be appealed because they are not based on property value.
Appeal Process
If you believe your assessed value is too high, you can file an application with the county Assessment Appeals Board. Key details:
- Filing deadline: July 2 - November 30 for the regular assessment roll (some counties have different windows)
- Evidence needed: Comparable sales showing your property is worth less than the assessed value
- Hearing: You present evidence to a 3-member panel
- Decision: The board can reduce, maintain, or (rarely) increase your assessment
California also allows an informal review with the assessor before filing a formal appeal. This can resolve straightforward errors without going through the hearing process.
Decline in Value (Prop 8) Reassessment
If your property's current market value falls below its Prop 13 assessed value, you are entitled to a temporary reduction called a "Prop 8 reduction." Many assessors do this automatically during market downturns, but you should check. When the market recovers, the assessed value can increase back up to the Prop 13 factored base year value.
Check Your California Property Tax
Even under Prop 13, over-assessments happen. If your base year value was set incorrectly, or if your property has declined in value below its assessed value, you could be overpaying.
Use our free property tax analyzer to compare your assessed value to current market conditions. If you are over-assessed, filing an appeal could reduce your tax bill for this year and establish a more accurate base going forward.
Frequently Asked Questions
What should I know about property taxes in california: rates, exemptions, and how they work (2026)?
California property taxes are governed by Proposition 13, which caps the base tax rate at 1% of assessed value and limits annual assessment increases to 2%. Your assessed value is set when you buy the property (or when it was last sold) and can only increase by up to 2% per year. When you sell, the new buyer's assessed value resets to the purchase price.
What should I know about proposition 13: the foundation?
Everything about California property taxes flows from Proposition 13, passed by voters in 1978. The key rules:
How Your Assessed Value Is Set?
When you buy a home in California, the county assessor sets your assessed value (called the "base year value") at the purchase price. From that point forward, the assessed value can increase by no more than 2% per year, regardless of how much the market moves.
What should I know about proposition 19?
Passed in 2020, Proposition 19 made two significant changes:
What should I know about supplemental tax bills?
California is unique in issuing supplemental tax bills when a property changes ownership or new construction is completed. The supplemental bill covers the difference between the old and new assessed value for the remaining portion of the fiscal year.
What should I know about exemptions?
California's homeowners' exemption is modest compared to other states. At $7,000 off the assessed value (not the tax), it saves about $70 per year at the 1% base rate. But it is free money, so apply for it.
What should I know about payment schedule?
California property taxes are paid in two installments: