California levies an annual ad valorem tax on real estate, including condominiums. This means the tax is based on the assessed value of the property, which is typically close to its market value. For example, a condo assessed at $500,000 would be subject to a tax calculated using that value and the applicable local tax rate. Proposition 13, passed in 1978, significantly impacted this system by limiting annual increases in assessed value.
Stable and predictable property taxes are crucial for homeowners and local governments. These taxes provide essential funding for vital public services like schools, libraries, parks, and emergency services. Proposition 13’s limitations on assessment increases provide homeowners with a degree of protection against dramatic tax hikes, promoting stability and affordability. This stability also allows local governments to more accurately forecast revenue and budget accordingly.
