How does Californias Prop. 13 affect real estate taxes?
Proposition 13, officially titled the “People’s Initiative to Limit Property Taxation,” was a ballot initiative to amend the constitution of the state of California. The initiative was enacted by the voters of California on June 6, 1978. It was upheld as constitutional by the United States Supreme Court in the case of Nordlinger v. Hahn, 505 U.S. 1 (1992). Proposition 13 is embodied in Article 13A of the California Constitution. The most significant portion of the act is the first paragraph, which capped real estate taxes: According to Section 1. (a), the maximum amount of any ad valorem tax on real property shall not exceed 1 percent of the full cash value of such property. The 1 percent tax to be collected by the counties and apportioned according to law to the districts within the counties. The “assessed value” may only be increased by a maximum of 2 percent per year, until and unless the property undergoes a change in ownership. At the time of the change in ownership an assessed va
