Curious minds want to know…Consider the following scenario. (Not necessarily pertinent to me)…
1. Person X buys a home with an assessed value is $1million in 2005.. But subsequently, was reassessed in 2012 down to $800k and pays property taxes based on $800k value starting in 2012.
2. Person Y buys a home in 2012 with an assessed value of $800k and pays property taxes based on the $800k value starting in 2012.
Assume that both properties begin to appreciate the same starting 2013 up to $1million by the time year 2020….
Assuming proposition 13 stays the same (big assumption) and relevant property tax propositions stay the same…
Starting in 2013, does Person X and Y end up paying the same property tax, or can Person X have a larger tax bill. I forget the clause in prop 13 in what happens when a property is reassessed downward and later appreciates…And I’m too lazy to read right now…
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.
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