Do you ever wonder why property taxes don't just skyrocket when home values rise in California?

Well, it's because of Proposition 13. You may have heard of it. And if you haven't heard of it, I'm gonna tell you about it. Proposition 13 was passed by voters in 1978. And here's what it does. It assesses the value of a property at 1% of the value. So if it’s worth a million dollars, your property taxes are gonna be $10,000 a year. And here's the kicker. Your property taxes cannot go up more than 2% year over year. So in California, we have seen much larger increases in property values year over year than 2%, but the property taxes stay at the level of just growing 2% year over year, sometimes even less, while the value of them goes way up. So that's why people who have been in their homes for 40 years pay nothing relatively in property taxes to somebody who just bought their home. There's a lot of criticism around Proposition 13 because people argue that they should be paying their fair share of property taxes to fund schools, firefighters, all that stuff, roads, you know, things you need. But it's probably not going away anytime soon. It's a third rail for politicians, so like it or not, it's probably here to stay. If you have questions about taxes or finances or getting started buying a home, just message us. Thanks.