Property Tax in California: Rates, Prop 13, and What Homeowners Actually Pay
California’s property tax system is unlike any other state’s, and understanding how it works is essential for anyone buying, owning, or selling real estate here. Use our home selling guide for detailed numbers. The entire system revolves around Proposition 13, the 1978 ballot measure that fundamentally changed how California taxes property. Prop 13’s 1% base rate and 2% annual assessment cap have created a system where your neighbor in an identical house might pay five times less in property taxes than you — simply because they bought their home 20 years earlier. For new buyers, this means your property tax bill will be based on your purchase price, not on what previous owners were paying.
The effective property tax rate in California averages 0.71% — the 16th lowest in the nation. But that average is misleading because it includes long-term homeowners with decades of Prop 13 protection paying rates far below 1%. A new buyer pays the full 1% base rate plus local additions, resulting in an effective rate of 1.1–1.3% on the purchase price. On a $785,000 statewide median, that’s $8,600–$10,200 per year. Here’s how every piece of the system works.
How California Property Tax Is Calculated
| Component | Rate / Amount | Notes |
|---|---|---|
| Prop 13 Base Rate | 1% of assessed value | Set at purchase price, increases max 2%/year |
| Voter-Approved Bonds | 0.05–0.20% | School bonds, infrastructure, transit |
| Special Assessments | $100–$2,000/year | Lighting, flood control, mosquito abatement, etc. |
| Mello-Roos (CFD) | $500–$5,000+/year | Common in newer developments |
| Homeowner’s Exemption | -$7,000 from assessed value | Must apply with county assessor |
| Effective Total Rate | 1.1–1.5% | Varies by location and special districts |
Proposition 13: The Foundation
Prop 13 established three core rules that still govern California property taxes today:
- Base rate cap: Property taxes are limited to 1% of assessed value (plus voter-approved overrides)
- Assessment growth cap: The assessed value can increase by no more than 2% per year, regardless of actual market value changes
- Reassessment trigger: The property is reassessed to current market value only when there’s a change of ownership or new construction
The practical effect: your assessed value starts at your purchase price and grows slowly (max 2% per year), while your home’s market value can grow at 5–10% per year. Over time, the gap between assessed value and market value widens, and your tax burden becomes increasingly favorable relative to what a new buyer would pay.
For detailed strategies on maximizing Prop 13 benefits, see our Prop 13 guide. Use our property tax calculator to estimate your tax based on purchase price.
Voter-Approved Bonds and Overrides
While Prop 13 caps the base rate at 1%, California voters can approve additional property taxes for specific purposes — primarily school facilities, community college construction, and local infrastructure. These voter-approved bonds add 0.05–0.20% to the tax rate depending on how many active bond measures are in your district.
Bond measures require a 55% supermajority vote (for school bonds under Prop 39) or a two-thirds vote (for other bonds). Once approved, they’re added to your property tax bill as a separate line item. You can see the specific bond measures on your annual property tax statement.
Mello-Roos (Community Facilities Districts)
Mello-Roos taxes are perhaps the most misunderstood component of California property taxes. Established under the Mello-Roos Community Facilities Act of 1982, these taxes fund infrastructure in new development areas — roads, sewers, parks, fire stations, and schools that serve the new community.
Key facts about Mello-Roos:
- Common in newer developments: If you’re buying a home built after 1990 in a master-planned community, there’s a good chance it has Mello-Roos taxes.
- Can be substantial: Mello-Roos taxes range from $500 to $5,000+ per year and are added on top of the standard property tax.
- They eventually expire: Most Mello-Roos bonds have a 20–40 year term. When the bonds are paid off, the tax disappears.
- Not covered by Prop 13: Mello-Roos taxes don’t grow with your assessed value — they’re set by the bond terms and can increase or decrease as bonds are paid off or new ones are approved.
- Disclosure required: Sellers must disclose Mello-Roos obligations to buyers. Review the disclosure carefully and calculate the impact on your total monthly housing cost.
Areas with significant Mello-Roos include Irvine, many Inland Empire developments, Elk Grove (Sacramento County), Otay Ranch (San Diego), and most master-planned communities built since the 1990s.
Special Assessments
Special assessments are parcel-based taxes for specific local services: street lighting, flood control, mosquito abatement, library funding, ambulance service, and similar purposes. They appear as individual line items on your property tax bill. Individually, each assessment is typically $20–$200/year, but collectively they can add $200–$1,000+ to your annual tax bill.
Special assessments vary widely by location. A rural property might have just one or two. A suburban home in a special district-heavy area might have 10+. Always review a property’s full tax bill (available from the county tax collector’s website) before making a purchase offer.
Property Tax by County
| County | Effective Tax Rate (New Buyer) | Median Home Value | Estimated Annual Tax |
|---|---|---|---|
| San Francisco | 1.15% | $1,350,000 | $15,525 |
| Santa Clara (San Jose) | 1.18% | $1,400,000 | $16,520 |
| Los Angeles | 1.16% | $865,000 | $10,034 |
| San Diego | 1.13% | $835,000 | $9,436 |
| Orange | 1.10% | $1,100,000 | $12,100 |
| Sacramento | 1.20% | $520,000 | $6,240 |
| Alameda (Oakland) | 1.22% | $900,000 | $10,980 |
| Riverside | 1.25% | $550,000 | $6,875 |
| San Bernardino | 1.18% | $460,000 | $5,428 |
| Fresno | 1.15% | $380,000 | $4,370 |
Note: effective rates exceed the 1% base because they include bonds, assessments, and (in some areas) Mello-Roos. Counties with more voter-approved bonds and special districts have higher effective rates.
Supplemental Property Tax
When you buy a home or complete new construction, the county assessor issues a supplemental tax bill to capture the difference between the previous assessed value and the new assessed value (your purchase price) for the remainder of the fiscal year. This is a one-time adjustment, but it can be a surprise for new buyers who aren’t expecting an additional tax bill 3–6 months after closing.
Example: You buy a home in January for $800,000. The previous owner’s assessed value was $400,000. The supplemental assessment captures the $400,000 difference for the remaining 6 months of the fiscal year (January through June). At 1%, that’s $4,000 in supplemental taxes, prorated to roughly $2,000 for the 6-month period.
Budget for supplemental taxes when buying. Your lender’s impound account won’t cover supplemental taxes — they’re billed directly to you as a one-time payment. Use our closing cost calculator to plan for this expense.
Homeowner’s Exemption
California offers a $7,000 reduction in assessed value for owner-occupied primary residences. At the 1% base rate, this saves approximately $70 per year. While the savings are modest, it’s free money — file the Homeowner’s Exemption with your county assessor after closing on your home. The exemption remains in effect until you sell the property or stop using it as your primary residence.
Property Tax and Home Sales
When buying or selling, property taxes create several considerations:
- For buyers: The listed property tax on a home reflects the current owner’s assessed value, which may be far below market value. Your taxes will be based on your purchase price. Always calculate your projected tax based on the purchase price, not the seller’s current bill.
- For sellers: Property taxes are prorated at closing — you pay through the date of sale, and the buyer pays from that point forward. The buyer’s tax obligation resets to the purchase price.
- For investors: Investment properties don’t qualify for the homeowner’s exemption. Prop 13 still applies, but the property may also be subject to local rental registration fees or business taxes.
Model your property tax scenarios with our property tax calculator and see how taxes affect your monthly payment with our mortgage calculator.
Compare With Other States
Considering other markets? Here’s how other states compare:
- Wisconsin Property Tax System Explained: What Homebuyers Need to Know
- Property Tax in Oklahoma: Rates, Exemptions, and What Homeowners Actually Pay
- South Carolina Property Tax System Explained: What Homebuyers Need to Know
Frequently Asked Questions
How much are property taxes in California?
The base rate is 1% of assessed value (set at purchase price), plus voter-approved bonds and special assessments that typically add 0.1–0.5%. The effective rate for new buyers ranges from 1.1–1.5% depending on location. On the statewide median of $785,000, expect roughly $8,600–$11,800 per year. Long-term owners pay less because their assessed value grows only 2% per year under Prop 13.
Are property taxes based on purchase price or market value?
Under Prop 13, your assessed value is set at your purchase price and can increase by no more than 2% per year. It is not reassessed to market value unless there’s a change of ownership or new construction. This means your property taxes are based on your purchase price plus cumulative 2% annual increases — not on current market value.
What is Mello-Roos tax?
Mello-Roos is a special tax levied by Community Facilities Districts (CFDs) to fund infrastructure in newer developments. It’s added on top of regular property taxes and can range from $500–$5,000+ per year. Mello-Roos bonds typically have 20–40 year terms and expire when the bonds are paid off. They’re most common in master-planned communities built after 1990.
Can my property taxes go down in California?
Yes, under two circumstances. First, if your property’s market value falls below its assessed value, you can request a Proposition 8 (temporary decline) reduction. Second, you can file an assessment appeal if you believe the assessor has overvalued your property. See our property tax appeal guide for the step-by-step process.
Do property taxes change when you remodel?
New construction (additions, ADUs, structural modifications that add square footage) triggers a supplemental assessment on the added value only. Your existing home’s assessed value is not affected. Replacement in kind (same-quality roof, kitchen fixtures, flooring) does not trigger reassessment. Solar panels and seismic retrofits are specifically exempt from reassessment.
How do property taxes work for inherited homes?
Under Proposition 19 (effective February 2021), a parent’s property tax basis can transfer to a child only if the child makes the home their primary residence within one year and the market value exceeds the factored basis by no more than $1 million. If the inherited property is used as a rental or second home, it’s fully reassessed to current market value. Read our Prop 13 guide for details on inheritance planning.