Property taxes in California are governed statewide by Proposition 13, passed in 1978. The tax rate is 1.0% (plus voter-approved bonded indebtedness) and assessed on the acquisition cost of an asset. It can be increased no more than 2.0% annually. The result is that over time, assuming housing costs increase, property taxes as a percent of market value decrease. If a property is "underwater" relative to acquisition cost, the assessment can be appealed/reduced.
The reason property taxes in California may appear high is that the average and median home prices are high relative to most parts of the US. This is particularly true for homes that were recently purchased. But homes that were purchased several years ago have property tax bills that are low relative to market value, thanks to Prop 13 protections.
A good comparison with California's property taxes is Texas and New Jersey. TX relies heavily on property taxes as it doesn't have a personal income tax. It isn't unusual for property taxes as a percent of market value to exceed 2.5-3.0%. In NJ, property tax rates are among the highest in the country, and often exceed 2.5% or more of market value.
California may have high taxes in some respects, but property taxes are a bargain. May God forever bless Howard Jarvis and Paul Gann!Bernie
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