California property tax starts with your home's assessed value, not its sale price

California property tax is calculated by multiplying your property's assessed value by the tax rate in your county. The assessed value is not what you paid for the house or what it's worth today — it's the value the county assessor sets, which is usually lower than market value. The tax rate varies by county and includes the base rate of 1% plus local additions for schools, fire districts, and other services.

The formula is straightforward: Assessed Value × Tax Rate = Annual Property Tax. But the assessed value itself follows specific rules that change when you buy, when you build, or when Proposition 13 reassesses your property. Understanding which value applies to your situation is the key to knowing what you'll owe.

Key Takeaways

  • Your assessed value under Proposition 13 is usually your purchase price, not your home's current market value, and it increases only 2% per year regardless of how much your home appreciates.
  • The tax rate in California is a base 1% plus local additions, so the total rate varies by county and can range from about 0.76% to over 1.25% of assessed value.
  • New construction, major renovations, and property transfers trigger a new assessment at current market value, which resets your base assessed value.
  • You can find your assessed value and tax rate on your county assessor's website or your property tax bill, and you can appeal the assessment if you believe it's wrong.

What assessed value means and how it differs from market value

The assessed value is the dollar amount your county assessor assigns to your property for tax purposes. In most California counties, this value is set at your purchase price when you buy the home. It is not an appraisal of what your home is worth on the open market today, and it is usually much lower than current market value, especially if you bought years ago.

Proposition 13, passed in 1978, limits how much the assessed value can increase each year. Once the assessor sets your base value, it can rise only 2% annually, even if your home's market value doubles or triples. This means a house bought for $300,000 in 2010 might be worth $800,000 today but still have an assessed value around $400,000 or less, depending on the exact purchase date and any reassessments.

The only time your assessed value jumps to current market value is when the property changes ownership, when you build a new structure, or when you make major renovations. A change of ownership triggers a new assessment at the current market value, which then becomes your new base for the 2% annual increases.

How the tax rate is set and what it includes

California's property tax rate has a base rate of 1%, set by state law. On top of this base, counties and local districts add their own rates for schools, fire protection, water districts, community colleges, and other services. The total rate you pay depends on where your property is located and which districts serve it.

Your property tax bill lists each of these additions separately. A typical bill might show 1% for the county general fund, 0.5% for schools, 0.1% for a fire district, and 0.05% for a water district, totaling 1.65%. Another county with different local needs might total 1.2%. The variation is significant — a property with a $500,000 assessed value pays $5,000 at a 1% rate but $8,250 at a 1.65% rate.

You can find your county's tax rate on your county assessor's website or on your property tax bill itself. The bill breaks down each component so you can see exactly which agencies are receiving tax revenue from your property.

When your property gets reassessed and your assessed value changes

Your assessed value stays at its base amount plus 2% annual increases until one of three things happens: the property sells, you build new structures, or you make major renovations. Each of these events triggers a reassessment at current market value.

Change of ownership is the most common trigger. When you buy a home, the assessor sets the base value at your purchase price (or the market value if that's lower). If you inherit a property, the assessed value usually stays the same under Proposition 19's rules, though there are narrow exceptions. If you receive a property as a gift from a parent or grandparent, Proposition 19 generally requires reassessment at market value, though some transfers between parents and children may be exempt.

New construction means any building you add to the property — a second house, a garage, a pool, or a major addition. The assessor adds the value of the new structure to your existing assessed value. Major renovations can also trigger reassessment, though the rules are narrow. The assessor must determine that the work increased the property's market value by more than a certain threshold (usually around 15% of the property's pre-improvement value). Routine maintenance, repairs, and cosmetic updates do not trigger reassessment.

Step-by-step calculation using your assessed value and tax rate

To calculate your annual property tax, you need two numbers: your assessed value and your tax rate. Both appear on your property tax bill, which the county assessor sends to you (and your lender if you have a mortgage).

Step 1: Find your assessed value on your property tax bill or on your county assessor's website. Search for your county name plus "assessor" and look for a property search tool. Enter your address and you'll see the current assessed value.

Step 2: Find your tax rate. This also appears on your bill, usually listed as a percentage or as a rate per $100 of assessed value. If it's listed per $100, divide by 100 to convert to a decimal. For example, $1.25 per $100 becomes 0.0125.

Step 3: Multiply assessed value by tax rate. If your assessed value is $500,000 and your tax rate is 1.2% (0.012), your calculation is $500,000 × 0.012 = $6,000 annual property tax.

Step 4: Divide by 12 if you want to know your monthly payment. $6,000 ÷ 12 = $500 per month. If you have a mortgage, your lender likely collects this amount each month as part of your escrow payment and pays the county on your behalf.

How to find your assessed value and tax rate online

Your county assessor maintains a public database where you can look up any property's assessed value and tax information. Start by searching "[Your County Name] Assessor" plus "property search" or "parcel lookup." Most counties have a free online tool that requires only your address or parcel number.

Once you find your property, the assessor's site shows your current assessed value, the date it was last assessed, and sometimes a history of past assessments. Some counties also display the tax rate breakdown by district. If the site doesn't show the tax rate, call your county assessor's office or check your property tax bill.

Your property tax bill itself is the most reliable source. It arrives once or twice per year (depending on your county) and shows your assessed value, the tax rate or rates applied, and the total tax owed. If you pay through escrow, your lender sends you an annual statement showing what was collected and paid on your behalf.

What to do if you think your assessed value is wrong

If you believe your assessed value is too high, you can file an appeal with your county assessor. The process and important date vary by county, but most require you to file within 30 days of receiving your property tax bill or within a specific window each year (often in the fall). Check your county assessor's website for the exact important date and forms.

To support your appeal, gather evidence that your property's value is lower than the assessed value. This might include a recent appraisal, a professional market analysis, sales prices of comparable homes in your area, or documentation of damage or needed repairs that reduce value. You do not need to hire an appraiser — comparable sales data and photographs are often enough.

If your appeal is denied, you can request a hearing before the county Assessment Appeals Board, which is independent of the assessor's office. This hearing is free and you can represent yourself. Many counties also offer informal review meetings before you file a formal appeal, which can resolve disagreements without paperwork.

Frequently Asked Questions

Does my property tax go up every year?

Your assessed value can increase by up to 2% per year under Proposition 13, so your tax bill usually rises slightly each year. If your tax rate changes (because a new school bond or district measure passes), your bill can jump more. A reassessment at market value — triggered by a sale, new construction, or major renovation — can cause a much larger increase.

What if I just bought my house — what assessed value will I have?

Your assessed value will be your purchase price (or the market value if that's lower). This becomes your base value, and it can increase only 2% per year going forward. If you paid $600,000, your assessed value starts at $600,000, not at what the house might be worth in five years.

Can I lower my property tax by doing repairs or improvements?

No — repairs and routine maintenance do not lower your assessed value. Major renovations can actually trigger a reassessment at a higher value if they increase the property's market value significantly. The only way to lower your tax bill is to appeal if you believe your current assessed value is wrong.

How do I know if my county's tax rate is higher or lower than other counties?

Tax rates vary widely across California. You can compare by looking at the total rate (base 1% plus all local additions) on your bill or the assessor's website. A rate of 1.1% is lower than 1.4%, for example. Rates depend on local school funding, district debt, and voter-approved measures, so they differ significantly even between neighboring counties.

What happens to my assessed value if I inherit a property?

Under Proposition 19, inherited property is usually reassessed at current market value, which can raise your tax bill significantly. However, if you inherit from a parent or grandparent and meet specific conditions, you may be exempt from reassessment. The rules are complex and depend on your relationship to the deceased and the property's use. Contact your county assessor to understand what applies to your situation.