[quote=svelte][quote=spdrun]Can someone explain CA law, as regards Prop-13… Am I correct that once assessment drops, it can’t be increased by more than 2% per annum, except if the property is sold? Or does it only mean that it can’t be increased by > 2%/yr above the original level at purchase?[/quote]
It has been awhile since I looked into it, but it is my recollection that the assessment can increase by 2% a year from the original assessed value at purchase.
If you get a temporary assessment drop, it can be increased in future years to reach whatever that original assessment + 2%/yr value turns out to be.[/quote]
Prop 13 dictates that property taxes can rise no more than 2% per year from 1978 if ownership remains unchanged (exempting offspring who inherit, who get to maintain this break). The 2% maximum annual increase applies to all properties bought after 1978.
If a property falls in market value below its assessed value, you can appeal it and get it lowered. But once its value climbs again the assessment can “catch up”, that is, go up in excess of 2% per year until it bounces up against the ceiling of “2% per year increase from date of purchase” rule.
So in the two examples you cited, yes, the two owners will end up paying different property taxes on properties with the same market value.
Cash purchased home…Probably better to sell it back to yourself if you really care.
