Passed by California voters in 1978, Proposition 13 fundamentally reshaped how property taxes are calculated in the state. It capped general property tax rates at 1% of a property’s assessed value and limited annual increases in assessed value to no more than 2%, unless a change in ownership or new construction occurs.
Read our overview of how Proposition 8 works to lower property values when the market drops →
1% tax rate based on the 1975-76 assessed value
Assessment can only increase up to 2% annually
Reassessment occurs when there's a sale or new construction
Under Prop 13, a change in ownership triggers a full reassessment at current market value. But certain transfers, like parent-child transfers (under Prop 58) or over-55 homeowner transfers (now Prop 19), can avoid reassessment.
Explore how we help property owners appeal reassessments →
Keeps property taxes predictable and affordable for long-term homeowners
Helps seniors and fixed-income residents stay in their homes
Incentivizes property retention, especially in high-growth areas like Los Angeles and the Bay Area
Creates significant disparities between neighbors' tax bills
Limits local government revenue, increasing reliance on sales taxes, special assessments, and state funds
Discourages housing turnover, which contributes to inventory shortages
This report by the California Legislative Analyst’s Office explains how Prop 13 affects property turnover and public services.
Many critics argue that commercial property owners have benefited disproportionately from Prop 13. Corporate entities can transfer ownership via legal entities without triggering a reassessment—something residential homeowners can't do.
This led to recent reform attempts, including the failed Proposition 15 split-roll initiative in 2020, which would have taxed commercial property based on market value while keeping Prop 13 protections for homeowners.
If you recently purchased property or completed construction, you may be facing a new, higher assessment. But that doesn’t mean you have to accept it. Appealing your property taxes can help you:
Avoid overpaying after reassessment
Take advantage of temporary value drops (via Prop 8 claims)
Correct county errors in property classification or valuation
Learn how our firm helps California property owners reduce their tax bills →
Despite decades of debate, Proposition 13 remains a cornerstone of California’s property tax system. While imperfect, it continues to offer stability to millions of homeowners and business owners alike.
As California property values fluctuate and tax policy evolves, it’s more important than ever to ensure you’re paying only your fair share. If you believe your property is overassessed, our team is here to help.