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California property taxes are based on the purchase price of the property. When you buy a home, the assessed value is equal to the purchase price. From there, the assessed value increases every year by the rate of inflation (change in the California Consumer Price Index), with a cap on increases of 2%.
This means that, for homeowners who have been in their house a long time, assessed value is often lower than market value. The same is true of homeowners in areas that have experienced rapid price growth such as San Francisco and San Jose in recent years.
Homeowners in California can claim a $7,000 exemption on their primary residence. This reduces the assessed value by $7,000, saving you at least $70 per year. You only need to claim this exemption once and it’s important to do so shortly after you buy – the due date is Feb. 15.
Property taxes are applied to those assessed values. Each county collects a general property tax equal to 1% of assessed value. That general tax is the single largest tax, but there are other smaller taxes that vary by city and district.
Voter-approved taxes for specific projects or purposes are common, as are “Mello-Roos” taxes. Mello-Roos taxes are voted on by property owners and are used to support special districts that finance services, public works or other improvements.
A good rule of thumb for California home buyers who are trying to estimate what their property taxes will be is purchase price x 1.25%. This incorporates the base rate of 1% and additional local taxes, which are usually about 0.25%.
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Simi Valley | California
1308 Madera Rd Suite 8,
Simi Valley, CA, 93065
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