Frequently Asked Questions – California Property Tax Propositions

1. What are the main Propositions that affect property taxes?
2. What is Proposition 13?
3. What is Proposition 3?
4. What is Proposition 8?
5. What are Propositions 58 and 193?
6. What are Propositions 60 and 90?
7. What is the difference between Proposition 60 and Proposition 90?
8. What is Proposition 110?

1. What are the main Propositions that affect property taxes?
   
   

   Proposition 13	Established limitations on increases in assessed value and set the maximum general property tax rate at 1 percent
   Proposition 3	Base Year Value Transfer for Property Taken by Governmental Action
   Proposition 8	Reduction in Assessed Value Due to a Decline in Value
   Proposition 58	Reassessment Exclusion for Real Property Transfers Between Parents and Children
   Propositions 60 and 90	Senior Citizen's Replacement Dwelling Benefit
   Proposition 110	Severely and Permanently Disabled Resident Exclusion
   Proposition 193	Reassessment Exclusion for Real Property Transfers from Grandparents to Grandchildren

2. What is Proposition 13?

   Proposition 13, passed in 1978, established the base year value concept for property tax assessments. Under Proposition 13, the 1975-1976 fiscal year serves as the original base year used in determining the assessment for real property. Thereafter, annual increases to the base year value are limited to the inflation rate, as measured by the California Consumer Price Index, or two percent, whichever is less. A new base year value, however, is established whenever a property, or portion thereof, has had a change in ownership or has been newly constructed.

   Under Proposition 13, the property tax rate is fixed at one percent of assessed value plus amounts required to repay any assessment bonds approved by the voters.

   Reference: Section 2 of Article XIII A of the California Constitution.

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3. What is Proposition 3?



Proposition 3 provides the transfer of a property's adjusted base year value to a replacement property when a property has been taken by eminent domain proceedings, acquisition by a public entity, or governmental action resulting in a judgment of inverse condemnation. Specific requirements must be met.

Reference: Section 2(d) of Article XIII A of the California Constitution and section 68 of the Revenue and Taxation Code.

4. What is Proposition 8?
   

   Proposition 8 requires the county assessor to annually enroll either a property’s adjusted base year value (Proposition 13 value) or its current market value, whichever is less. When the current market value replaces the higher Proposition 13 value on the assessor’s roll, that lower value is commonly referred to as a "Prop 8" value.

   Although the annual increase for a Prop 13 value is limited to no more than two percent, the same restriction does not apply to values adjusted under Prop 8. The market value of a Prop 8 property is reviewed annually as of January 1; the current market value must be enrolled as long as the Prop 8 value still falls below the Prop 13 value. Thus, any subsequent increase or decrease in market value is enrolled regardless of any percentage increase or decrease. When the current market value of a Prop 8 property exceeds its Prop 13 value (adjusted for inflation), the county assessor reinstates the Prop 13 value.

   Reference: Section 2(b) of Article XIII A of the California Constitution and section 51 of the Revenue and Taxation Code.

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5. What are Propositions 58 and 193?

   Proposition 58 provides for an exclusion from reassessment real property transfers between parents and children. Proposition 193 expands this tax relief to include certain transfers from grandparents to their grandchildren (transfers from grandchildren to grandparents are not eligible). Specific requirements must be met.

Reference: Section 2(h) of Article XIII A of the California Constitution and section 63.1 of the Revenue and Taxation Code.

6. What are Propositions 60 and 90?

   Propositions 60 and 90 allow senior citizens to transfer the adjusted base year value from their current home to a replacement dwelling. Certain requirements must be met.

   In general, if you or your spouse is age 55 or older, you or your spouse may buy or construct a new home of equal or lesser value than your existing home and transfer the adjusted base year value of your existing home to your new home if certain requirements are met. This is a one-time-only benefit. Thus, once you have filed and received this tax relief, neither you nor your spouse (if your spouse is a record owner of the replacement dwelling) can ever be granted this benefit again. The only exception is if you or your spouse becomes disabled after receiving this tax relief for age. If this happens, you or your spouse may transfer the base year value a second time based upon the disability. The relief for disability involves a different claim form.

   Reference: Section 2(a) of Article XIII A of the California Constitution and section 69.5 of the Revenue and Taxation Code.

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7. What is the difference between Proposition 60 and Proposition 90?

   Proposition 60 relates to transfers of base year values between properties located within the same county. Proposition 90 relates to transfers of base year values from an original property in one county to a replacement property in another county within California. For a transfer to be eligible under Proposition 90, the county in which the replacement property is located must have adopted an ordinance that allows such transfers. Currently, the following seven counties have passed ordinances authorizing these intercounty transfers:

   Alameda	Orange	San Mateo	Ventura
   Los Angeles	San Diego	Santa Clara

   This list may change at any given time. Please call your county assessor's office to check if your county has passed such an ordinance.

8. What is Proposition 110?

   Proposition 110 extends the benefits of Propositions 60/90 to qualified disabled homeowners of any age. Other than the age factor, the same requirements under Propositions 60/90 must be met. Effective September 25, 1996, qualified persons who had prior claims based on age may file a second claim based on disability. However, once a person qualifies due to disability, he or she may not receive the base year value transfer benefit due to age.

   Reference: Section 2(a) of Article XIII A of the California Constitution and section 69.5 of the Revenue and Taxation Code.

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