What Is Proposition 13
Proposition 13, passed by California voters in 1978, limits property tax to 1% of the county assessor's valuation and caps annual increases in assessed value at 2% per year, regardless of market conditions. The assessed value only resets to current market value when the property changes ownership or new construction occurs.
How Assessment Works Under Proposition 13
When you buy a property, the county assessor establishes a base year value using the purchase price as the foundation. From that point forward, your assessed value increases by no more than 2% annually until the property transfers to a new owner. This protects long-term owners from sudden tax spikes, but it also creates significant disparities. Two identical houses on the same street can have vastly different assessed values and tax bills based solely on when they were last purchased.
The 2% cap applies strictly. If your assessed value last year was $400,000, this year's maximum is $408,000 (2% of $400,000), even if comparable sales show your property is worth $550,000. This protection explains why appealing an assessment under Proposition 13 requires demonstrating that your current assessed value exceeds what it should be within the cap formula, not arguing that market value is lower.
Appealing Assessments Under Proposition 13
You can file a Proposition 13 assessment appeal with your county assessor's office if you believe your assessed value is incorrect. The appeal deadline is typically 30 days from the assessment roll date, though some counties allow longer periods if the assessor made an obvious error.
- Gather evidence of comparable sales from the past 12 months, preferably properties within a half-mile radius of your parcel with similar characteristics (square footage, lot size, condition, age)
- Request the county assessor's appraisal report for your property to understand the valuation method used
- Document any physical defects or functional obsolescence affecting value
- File a formal appeal application with the county assessor, typically including your property details and requested assessed value
The Board of Review Hearing
If the assessor denies your appeal or you disagree with their decision, you can request a hearing before the county assessor's board of review. This independent panel typically consists of three members and hears appeals based on valuation evidence you present. Bring comparable sales data that supports a lower assessed value. The board can only reduce or maintain the assessment, not increase it. If you lose at the board level, you have the right to appeal to the county superior court, though this requires professional representation and significant legal costs.
Exemptions and Special Situations
Proposition 13 includes exemptions that may reduce your assessed value. Properties used for religious worship, charitable purposes, or educational use by nonprofits qualify for exemptions. California also offers exemptions for disaster relief, where damaged property assessments can be reduced immediately rather than waiting for a reappraisal. Additionally, the welfare exemption allows low-income homeowners to apply for assessment reductions based on property condition and income limits.
Change of ownership situations trigger reassessment. Even if your property qualifies as an exclusion (transfers between spouses or parents and children meeting specific criteria under Proposition 58 or Proposition 193), filing the exclusion claim within the required timeframe is essential to avoid reassessment.
Common Questions
- Can my assessed value go down under Proposition 13? Yes, if you successfully appeal based on valuation errors or if your property suffers damage. However, once reduced, the new base value becomes your starting point for future 2% annual increases. Market declines alone do not automatically lower assessments.
- Does Proposition 13 apply to commercial property? Yes. Commercial, industrial, and residential properties all receive the same 1% tax rate and 2% annual cap protection. Commercial owners often have comparable sales data that supports appealing inflated assessments.
- What happens if I inherit property? Without filing a valid Proposition 58 or 193 exclusion claim, inherited property is reassessed at current market value immediately. The clock starts a new 2% cap cycle. Exclusion claims must be filed with the assessor, typically within three years of death, to avoid reassessment.