California property tax starts with your home's assessed value, not its market price

California property tax is calculated by taking your home's assessed value and multiplying it by the tax rate set by your county. The assessed value is usually 1% of the price you paid for the property, locked in on the date you bought it. That 1% figure is called the base tax rate, and it applies statewide. Your county then adds voter-approved local taxes on top of that base rate, which is why two homes worth the same amount can have different tax bills depending on where they sit.

The math itself is straightforward: Assessed Value × Tax Rate = Annual Property Tax. The tricky part is understanding what "assessed value" means in California, because it does not change every year the way it does in most other states. Once you buy a home, the county assessor locks in that value. It only goes up if you make major improvements to the property, and it only resets to current market value if you sell and someone else buys it.

Key Takeaways

  • Your assessed value in California is typically 1% of the purchase price, set on the date of purchase and locked in until you sell.
  • The base tax rate is 1% statewide, but your county adds local taxes on top, making the total rate vary by location.
  • You can find your assessed value and tax rate on your property tax bill or by searching your county assessor's website.
  • Home improvements and new construction trigger reassessment, but regular wear and market changes do not.
  • You receive your property tax bill in the fall, with payment due in two installments: November and February.

Understanding assessed value and how it differs from market price

The assessed value is what the county uses to calculate your tax bill, and it is almost never the same as what your home is actually worth on the market. When you buy a home in California, the county assessor records the sale price. That price becomes your assessed value. If you paid $500,000 for your house, your assessed value starts at $500,000, and your base tax is $5,000 per year (1% of $500,000).

Here is the key difference from other states: that $500,000 assessed value does not automatically jump to $600,000 just because the market went up and your home is now worth $600,000. It stays at $500,000 until you sell the property. This is called Proposition 13 protection, named after the 1978 law that created this system. It means your tax bill stays predictable year to year, even if your neighborhood becomes more expensive.

The assessed value does increase by a small amount each year—up to 2% annually—but only if you do not sell. This yearly increase is automatic and is meant to keep pace with inflation. So if your assessed value was $500,000 in year one, it might be $510,000 in year two, then $520,200 in year three, and so on. But if your home's market value jumps to $700,000 because the neighborhood became desirable, your assessed value stays locked at the lower number until you sell.

How to find your tax rate and calculate the total bill

Your property tax bill has two parts: the base 1% tax and the voter-approved local taxes added by your county, city, or special districts. The total rate varies by location. In some counties it might be 1.15%, in others 1.25% or higher. You do not calculate this yourself—the county assessor does—but you can find the exact rate on your property tax bill or on your county assessor's website.

To find your rate, search "[Your County] assessor property tax rate" or "[Your County] assessor online." Most county assessor offices let you search by address or parcel number and see your assessed value, tax rate, and estimated bill. If you cannot find it online, call your county assessor's office directly. They can tell you your assessed value, your tax rate, and what your annual bill will be.

Once you have both numbers, the calculation is straightforward: multiply your assessed value by your tax rate. If your assessed value is $500,000 and your county's total tax rate is 1.2%, your annual property tax is $6,000. That bill arrives in the fall (usually October or November) and is due in two installments: the first half by November 30 and the second half by February 28.

When your assessed value goes up: improvements and new construction

Your assessed value stays locked until you sell—with one major exception. If you make significant improvements to your home, the county assessor can reassess the property and increase the assessed value to reflect those improvements. This does not happen automatically. The assessor finds out through building permits, so if you pull a permit for a major renovation, expect a reassessment notice.

What counts as an improvement? Adding a room, finishing a basement, installing a new roof, or adding a deck or pool typically triggers reassessment. Routine maintenance like repainting, replacing windows, or fixing the plumbing does not. The assessor will send you a notice if they plan to reassess, and you have the right to appeal the new value if you think it is too high.

New construction is reassessed at full market value on the date it is completed, not at the purchase price. If you build a new home on land you own, the assessed value is set based on what the finished home is worth, not what you spent to build it. This is one reason new homes often have higher property tax bills than older homes in the same neighborhood.

Property tax bills and payment important date

Your property tax bill arrives once a year, usually in October or early November. It covers the fiscal year from July 1 to June 30. The bill shows your assessed value, your tax rate, the total amount due, and the two payment important date. The first installment (usually about half the total) is due by November 30. The second installment is due by February 28. You can pay both at once if you prefer.

If you have a mortgage, your lender may handle property tax payments for you through an escrow account. Your monthly mortgage payment includes a portion set aside for taxes and insurance. The lender pays the bill on your behalf when it is due. Check your mortgage documents or call your lender to confirm whether they are paying your property taxes.

If you pay late, you owe a penalty. Missing the November 30 important date triggers a 10% penalty on the first installment. Missing the February 28 important date adds another 10% penalty on the second installment, plus interest. If you cannot pay on time, contact your county tax collector to discuss payment plans or hardship options.

How to appeal your assessed value if you think it is too high

If you believe your assessed value is incorrect, you can file an appeal with your county assessor. The most common reason to appeal is if your home's market value dropped significantly—for example, if the market crashed and your home is now worth much less than you paid for it. You have until the important date shown on your property tax bill, usually around 60 days after you receive it.

To file an appeal, contact your county assessor's office and ask for the Proposition 8 process or assessment appeal form. The name varies by county, but the process is the same. You will need to provide evidence that your assessed value is too high—usually recent appraisals, comparable sales in your area, or documentation of damage or defects that lower the home's value.

If your appeal is successful, the assessor will lower your assessed value, and your property tax bill will drop. The reduction applies to the current year and sometimes to prior years as well, depending on your county's rules. If the assessor denies your appeal, you can appeal to the county assessment appeals board, though this process is more formal and may require a hearing.

Special situations: transfers, exemptions, and reassessment

In most cases, when you buy a home, the assessed value resets to the purchase price. But California has a few exceptions. If you inherit a home from a parent or grandparent, you may be able to keep the lower assessed value under Proposition 19 rules, though the rules changed in 2021 and now depend on whether the property is your primary residence. If you are inheriting property, contact your county assessor to understand how reassessment will work.

Some property owners may have access to for exemptions that reduce their assessed value. Homeowners over 65, disabled homeowners, and veterans may may have access to for exemptions that lower the assessed value by a set amount (usually $7,000 to $14,000, though this varies by county). You have to explore for these exemptions; they do not happen automatically. Contact your county assessor to see if you may have access to and how the process works.

If you own commercial property or rental property, the rules are different. Commercial property is reassessed every year, not locked in like residential property. Rental property is also reassessed annually. These properties do not get Proposition 13 protection, so your tax bill can change significantly from year to year if the market value changes.

Frequently Asked Questions

Can my property tax bill go down if my home loses value?

Only if you file an appeal. Your assessed value does not automatically drop when the market falls. You must file a Proposition 8 appeal with your county assessor, usually within 60 days of receiving your tax bill, and provide evidence that your home is worth less than the assessed value. If approved, your bill will be reduced retroactively.

What happens to my property tax if I refinance my mortgage?

Refinancing does not change your property tax. Your assessed value stays the same because you are not selling the home—you are just changing your loan. Property tax only resets when the property is sold to a new owner. Refinancing affects your mortgage payment and interest rate, but not your property tax bill.

Do I have to pay property tax if I own my home outright with no mortgage?

Yes. Property tax is owed by the property owner, whether or not there is a mortgage. If you own the home free and clear, you are responsible for paying the property tax bill directly to your county tax collector. You cannot skip it or defer it—unpaid property taxes can lead to a tax lien or foreclosure.

How much does property tax increase each year in California?

Your assessed value can increase by up to 2% per year, even if you do not sell. This is an automatic adjustment meant to keep pace with inflation. So if your assessed value is $500,000, it might increase to $510,000 the next year, then $520,200 the year after. The actual increase depends on the inflation rate and your county's rules.

What if I disagree with the county assessor's decision on my appeal?

You can appeal to your county's assessment appeals board, which is an independent body separate from the assessor's office. This appeal is more formal and may involve a hearing where you present your case. Contact your county assessor for the important date and process for filing a second appeal.