Introduction
So, you’ve found the perfect home in California—great schools, a nice backyard, and maybe even a lemon tree for those homemade margaritas. But before you pop the champagne, there’s one more thing to figure out: property taxes.
If you’re wondering how much you’ll be paying each year (and whether it’s enough to fund a small vacation), you’re not alone. Property taxes can feel complicated, but don’t worry—I’ll break it down in simple, everyday terms so you know exactly what to expect when buying a home in California.
Let’s get into it!
1. How Do Property Taxes Work in California?
California property taxes are based on the purchase price of your home. Thanks to Prop 13, property taxes are capped at 1% of your home’s assessed value, plus a little extra for local fees and bonds (we’ll get to that).
Example:
📌 You buy a home for $600,000
📌 Base property tax: 1% = $6,000 per year
📌 Additional local fees & bonds (varies by city): 0.25%–0.50%
📌 Estimated total tax bill: $6,000 – $9,000 per year
💡 Fun Fact: If you bought a home back in the ‘70s for $50,000, your tax bill would be laughably low today. But for new buyers, taxes reset to the purchase price. Welcome to homeownership!
2. Can Property Taxes Increase Over Time?
Short answer? Yes—but not by much.
📌 Under Prop 13, annual tax increases are limited to 2% per year, regardless of how much your home’s market value rises.
This is great news for long-term homeowners! While your neighbor who bought in 1990 might be paying property taxes on a $200,000 assessment, a new buyer today could be taxed on $800,000+ for the same home.
💡 Tip: If you inherit a home, you may be able to keep the lower tax rate (we’ll get to that in a second).
3. Are There Any Property Tax Exemptions?
Yep! California offers a few ways to lower your property tax bill—because who doesn’t love a little discount?
✔ Homeowners' Exemption: Knock $7,000 off your assessed value just for living in your home (saves you about $70 per year—hey, that’s a nice dinner out!).
✔ Senior Tax Transfer (Prop 19): If you’re 55+, you can transfer your lower tax rate to a new home in California—huge savings if you’re downsizing!
✔ Disabled Veterans’ Exemption: If you’re a disabled veteran, you could get a huge reduction or even full exemption from property taxes.
✔ Parent-to-Child Transfer: If you inherit a home, you may be able to keep the original low tax rate (but check the rules—Prop 19 changed this).
4. Can You Pay Property Taxes Monthly?
Yes! Most homeowners bundle property taxes into their mortgage payments through an escrow account.
✔ Your lender collects taxes each month and pays the county when they’re due.
✔ This keeps you from getting a huge bill twice a year (because who likes surprise expenses?).
If you don’t have a mortgage, you’ll pay property taxes directly to the county—usually in two installments per year:
📌 First installment: Due November 1 (late after Dec 10)
📌 Second installment: Due February 1 (late after Apr 10)
💡 Tip: Mark your calendar! California counties don’t send reminders—they just send late fees if you forget.
5. What Happens If You Don’t Pay Property Taxes?
Missing a tax payment? Yikes. California counties don’t play around with unpaid property taxes.
📌 After April 10: A 10% penalty is slapped onto your bill.
📌 After June 30: The county considers your property “tax-defaulted.”
📌 After 5 years: The county can sell your home at auction to recover unpaid taxes.
💡 Bottom Line: Pay your taxes. The government doesn’t send “friendly reminders”—just late fees and foreclosure notices.
6. What Should Homebuyers Do Before Closing?
Before buying a home in California, make sure you’re comfortable with the estimated tax bill. Here’s what to check:
✔ Ask the Seller for Recent Tax Bills – Don’t assume their rate will be yours, but it helps you see local fees.
✔ Use a Property Tax Calculator – Many county websites offer property tax estimators.
✔ Check for Mello-Roos Taxes – Some newer communities have extra taxes for local schools, parks, and fire stations (these can be hefty).
💡 Tip: If you’re buying in a new development, double-check the total tax rate—sometimes it’s closer to 1.5%–2% of home value!
Final Thoughts: Property Taxes Don’t Have to Be Scary
Owning a home in California comes with property taxes, but with the right knowledge and planning, you’ll be prepared.
Here’s what to remember:
✔ Taxes are based on the purchase price (plus local fees).
✔ They can only increase 2% per year (thanks, Prop 13!).
✔ There are exemptions that can save you money—apply for them!
✔ Make sure you budget for tax payments (monthly or bi-annually).
💰 Ready to Buy or Sell? Save Thousands with ListLean!
Thinking of selling? Why pay 5-6% commission when you can list your home for just $95 with ListLean’s Flat-Fee MLS service?
✅ Get MLS exposure on Zillow, Redfin, and Realtor.com
✅ Save thousands in agent commissions
✅ Keep more of your profit
👉 Get started today at ListLean.com and take control of your home sale! 🚀
.jpg)
.svg)
.svg)