California property tax: Prop 13, exemptions and LA rates

How is assessed value set?

California taxes the value set when you buy. Article XIII A, Section 2 of the Constitution defines “full cash value” as the appraised value when the property is purchased, newly constructed, or changes ownership. The State Board of Equalization (BOE) calls this the base year value.

After that, the value can grow with inflation, but by no more than 2% a year (§ 2(b)). If the market value falls below it, the assessor can enroll the lower value: the LA County Assessor calls this a “decline-in-value” review, allowed by Proposition 8 (1978). Two similar homes on one street can pay very different taxes because they were bought in different years.

What is added to the 1%?

Article XIII A, Section 1(b) lets three kinds of debt sit above the 1% limit:

• debt approved by voters before July 1, 1978;
• bonds to buy or improve real property approved by two-thirds of voters after that date;
• school facility bonds approved by 55% of voters, under accountability rules.

These rates vary by Tax Rate Area (TRA), a group of parcels taxed by the same agencies; the TRA number is printed on each bill (LA County Auditor-Controller).

Your bill can also carry direct assessments: flat per-parcel charges, not based on value, says the LA County Treasurer and Tax Collector (TTC). They include Mello-Roos community facilities district charges, sewer, street lights and other special taxes. Ask for the seller’s current bill before you buy.

What does the homeowners’ exemption save?

The California Constitution gives a $7,000 reduction in taxable value for an owner-occupied principal residence, per the BOE. Rentals and vacation homes do not qualify. The LA County Assessor confirms the amount in 2026 and estimates the saving at roughly $70 a year at a 1% rate.

You file once, with Form BOE-266, with the county assessor. LA County sends the form automatically to new owners. To get the full exemption for a year, the home must be your principal residence on January 1 and you must file by February 15. A claim filed by December 10 still gets 80% of the exemption (BOE Publication 29).

Proposition 19: transfers of the tax base

Voters approved Proposition 19 on November 3, 2020. Its main rules, per the BOE:

The $1 million amount is adjusted every other February 16; it is $1,044,586 for transfers from February 16, 2025 to February 15, 2027 (BOE Letter to Assessors 2025/009). The child must claim the homeowners’ exemption within one year. A base year transfer claim goes to the assessor of the replacement home’s county once both transactions are complete, not through escrow.

The supplemental bill after you buy

A purchase triggers a reassessment as of the first day of the following month (LA County TTC). The county then sends a supplemental bill for the difference between the old and new value, prorated over the months left in the fiscal year (July 1 to June 30). A purchase between January 1 and May 31 creates two bills: one for the rest of the current year, one for the whole next year (BOE Publication 29). They arrive about 6 months after the purchase (LA County Assessor), and lenders usually do not pay them from the escrow account.

Example: a $900,000 home in Los Angeles

This uses the FY 2026-27 rates for TRA 00004, inside the City of Los Angeles, from the LA County Auditor-Controller’s CR12 file (September 2026). The buyer paid $900,000 in 2026, lives there and has the exemption. Direct assessments are excluded.

Without the $7,000 exemption, the home would owe $10,672.43, so the exemption saves $83.01 here.

Supplemental example: the seller’s assessed value was $500,000 and you bought in April 2026. The first bill covers May and June 2026: about $400,000 × 1.18738% (the FY 2025-26 rate for TRA 00004) × 2/12, roughly $792. The second covers FY 2026-27: $400,000 × 1.185825% = $4,743.30.

See also closing costs in California, home prices in California and the Los Angeles guide.

Deadlines in Los Angeles County

A late installment costs a 10% penalty, plus $10 on the second (LA County TTC). Unpaid taxes then become tax-defaulted, with redemption penalties of 1.5% a month (BOE Publication 29). A formal appeal goes to the Assessment Appeals Board, for a $46 non-refundable fee with a hardship waiver; for your own case, contact the assessor or the board.