Current California Property Tax Law applies to all property owners in the state of California. Current California Property Tax Law was put into law as part of the California Constitution in 1978 by voters to control the amount of property taxes paid by homeowners. Before Prop 13 there was no limit to help taxpayers on property taxes. The assessed value was based on the varying home values every year and because the market values increased substantially over time in California, the amount of property taxes increased tremendously. As the values of the homes went up over time, older folks on fixed incomes were being driven out of their homes unable to pay the property tax increases.

Current California Property Tax Law was passed to assist seniors on fixed incomes who could not adjust to increasing property taxes. This amendment was initiated by Howard Jarvis was a result of a ballot initiative passed by voters in June of 1978, called People’s Initiative to Limit Property Taxation. Current California Property Tax Law is an amendment to the California State Law and is still a hot topic today because of its limiting nature and the imbalance it has created in terms of how much each homeowner pays. Homeowners who bought thirty years ago dont pay nearly as much in property taxes as those who have acquired homes recently and as a result of this many taxpayers feel Prop 13 is unfair and should be repealed.

Prop 13 applies to all who own property in California even those who have purchased recently. What Current California Property Tax Law does even today is place a limit on the amount of property taxes the state can charge you. The initial purchase price of your property, as long it was an open market transaction, becomes your base value.

A market transaction means that as long as your purchase price was market value it will be accepted as your taxable base value. If you paid well below market value for your home the Assessor will assess you at market value because that is what California Property Tax Law states. Your assessment is based on market value as of the re-assessable event and if your purchase price was market value the Assessor will accept it as market value. If not, the Assessor will determine a value for you.

Generally, most Californians pay about 1.25% of their assessed value in actual property taxes per year. The difference between your base value and your assessed value is very simple. Your base value is the value established as of the date of a re-assessable event, often this is when you initially purchased your property. The assessed value is the value you pay taxes on for a designated year since all base values have a 0-2% increase per year based on Current California Property Tax Law.

The base value is the value property taxes are based on and then it increases slightly every year. Generally, most California Homeowners pay about 1.25% of their assessed value in actual property taxes per year. So as your base value increases every year raising your property tax value year to year, accordingly what you pay in property taxes increases. Remember the amount you pay is limited based on Prop 13. So even if the market sky rockets and your market value increases substantially, your property tax base wont increase along with the market it is limited to the 2% trend based on California Property Tax Law.

About the author: Valerie Faltas has specialized in Property Taxes for the past 5 years and has produced a free report that exposes the truth about Prop 13 and Prop 8. Check out our FREE California ebook which explains Prop 13 in more depth with examples! Feel free to contact me with any questions you may have! Get your free report on Prop 8 and Prop 13 now. You have full permission to reprint this article provided this box is kept unchanged.