California's property tax rate and how it's calculated
California's property tax is 1% of your home's assessed value, plus any local voter-approved bonds or assessments on top of that base rate. The 1% is set by state law and applies statewide. On a home assessed at $500,000, the base property tax would be $5,000 per year before any local additions.
Your county assessor determines the assessed value, which is usually the purchase price when you buy the home. After that, the assessed value can increase by no more than 2% per year, even if your home's market value rises faster. This 2% cap stays in place until you sell the property, at which point the assessor resets the value to the new purchase price.
The total bill you receive includes the 1% base rate plus any local assessments. These local additions vary by county and city. Some counties add 0.1% or less; others add significantly more depending on local bonds for schools, fire districts, or infrastructure. Your county assessor's office can tell you the exact breakdown for your address.
Key Takeaways
- California's base property tax rate is 1% of assessed value, set by state law and the same everywhere in the state.
- Your assessed value is usually your purchase price and increases by a maximum of 2% per year until you sell.
- Local voter-approved bonds and assessments are added on top of the 1% base rate, so your total bill varies by location.
- Your county assessor determines your assessed value and sends your bill; you can request a reassessment if you believe the value is wrong.
- Property taxes are due in two installments: one in November and one in February, with penalties for late payment.
When your assessed value changes
Your assessed value stays locked at your purchase price and grows only 2% per year until you sell your home. This is called the Proposition 13 protection, passed in 1978. It means even if your neighborhood home values double, your assessed value and tax bill grow slowly.
When you sell, the new owner's assessed value resets to the new purchase price. If you bought for $400,000 and sell for $600,000 ten years later, the new owner's assessed value becomes $600,000, and their tax bill jumps accordingly. You keep the lower assessed value as long as you own the home.
A few events other than a sale can trigger reassessment: transferring the property to a trust, adding a structure, or making major improvements. Minor repairs and maintenance do not trigger reassessment. If you believe your assessed value is wrong, you can file a Proposition 8 appeal with your county assessor, usually within 30 days of receiving your bill.
Local assessments and bonds on your bill
Beyond the 1% base rate, your property tax bill includes charges for local bonds and special assessments. These are approved by local voters and fund schools, fire departments, water systems, flood control, and other services. They appear as separate line items on your bill.
The amount varies widely by location. A home in one county might pay $500 in local assessments while an identical home in another county pays $2,000. You can see the breakdown on your property tax bill or by contacting your county assessor's office. Some assessments are based on property value; others are a flat fee per parcel.
Voter-approved bonds typically last 20 to 30 years and then expire. When a bond expires, that line item disappears from your bill. New bonds are voted on periodically, so the total assessment amount can change year to year.
How to pay your property tax bill
Your county tax collector sends property tax bills twice per year. The first installment is due November 1, and the second is due February 1. Both have a grace period: you can pay without penalty until December 10 for the first bill and April 10 for the second.
You can pay by mail, in person at your county tax collector's office, or online through your county's website. Many counties accept credit cards or electronic bank transfers, though some charge a fee for credit card payments. Check your county tax collector's website for the exact payment methods and any fees.
If you miss the grace period, a 10% penalty is added to the unpaid amount. After that, interest accrues at 1.5% per month. If the bill remains unpaid for five years, the county can foreclose on the property and sell it at a tax sale.
Homeowner exemptions and reductions
California offers a homeowner's exemption that reduces your assessed value by $7,000 for your primary residence. This means you pay tax on $7,000 less than your actual assessed value. On a $500,000 home, you would pay tax on $493,000 instead.
You must file for the homeowner's exemption with your county assessor, usually in the year you purchase the home or move into a new primary residence. The exemption applies automatically in some counties if you register to vote at that address; in others, you must file a form. Contact your county assessor to confirm whether you need to file and the important date.
Other exemptions exist for seniors, disabled persons, and veterans, though these vary by county and have income or age limits. Your county assessor's office can tell you whether you meet the requirements for any of these programs.
Understanding your property tax bill
Your bill shows your assessed value, the tax rate applied to it, and each local assessment or bond charge. It also shows the due dates and payment address. The bill is sent to the property owner of record, which may be a trust or corporation if you hold title that way.
If you own property in multiple counties, you receive separate bills from each county. If you own a commercial property, it may be reassessed annually rather than capped at 2% growth, so your bill can change more dramatically year to year.
Your bill does not include state income tax, sales tax, or transfer taxes. Those are separate and handled through different channels. Property tax is a local tax collected by your county and distributed to schools, fire districts, and other local services.
Frequently Asked Questions
Can I deduct California property taxes on my federal income tax return?
Yes, you can deduct property taxes on your federal return, but only up to $10,000 per year total for all state and local taxes combined (property tax, income tax, and sales tax together). This limit applies to all taxpayers regardless of income. Consult a tax professional about your specific situation.
What happens if I don't pay my property tax bill?
A 10% penalty is added after the grace period ends. Interest then accrues at 1.5% per month on the unpaid balance. If the bill remains unpaid for five years, the county can foreclose and sell your property at a tax sale to recover the debt.
Does my property tax bill include homeowners insurance?
No. Property tax and homeowners insurance are separate. If you have a mortgage, your lender may require you to pay insurance as part of your monthly mortgage payment, but it is not part of the property tax bill itself.
Can I pay my property taxes in monthly installments instead of twice a year?
Most counties do not offer monthly payment plans for property taxes. You must pay the two annual installments by the due dates. If you cannot pay in full, contact your county tax collector about hardship options or payment arrangements before the bill becomes delinquent.
What's the difference between assessed value and market value?
Market value is what your home would sell for today. Assessed value is what the county uses to calculate your tax bill, usually your purchase price plus 2% per year. The two can be very different if your home has appreciated significantly or if the market has declined since you bought.