California Property Tax Reassessment: The Rules, Explained in Plain English

Proposition 13 (1978) is the foundation. It sets a property's taxable value to its value when you acquired it (the base-year value), caps the general tax rate at 1%, and limits growth in the taxable value to no more than 2% a year.

What it means for you: your taxable value is generally reassessed to current market value only when there is a change of ownership or new construction. Everything below is really about which events count as one of those two — and which are excluded.

A “change in ownership” (section 60) is a transfer of a present beneficial interest in real property of value substantially equal to the fee. Section 61 lists transfers that are changes in ownership; section 62 lists ones that are excluded (for example, transfers that only correct title, or transfers of a proportional interest into a legal entity where the underlying ownership does not change).

What it means for you: a sale is the classic trigger. But many family and estate transfers are specifically excluded — the sections below cover the common ones. When in doubt, the county assessor makes the determination.

New construction — a substantial addition or alteration that adds value — is reassessed, but the assessor reassesses only the new construction's value, which is added to your existing base-year value. The rest of the property keeps its Prop 13 value. Ordinary repairs and normal maintenance do not count.

What it means for you: building an ADU or adding a room raises your tax by the value of what you built — not by reassessing your whole home. The one-time catch-up is billed as a supplemental assessment.

Transfers between spouses (and registered domestic partners) are excluded from reassessment — adding or removing a spouse from title, transfers on death, and transfers incident to a divorce.

What it means for you: putting your spouse on (or off) title does not cause a reassessment.

Proposition 19 (2020) narrowed the old parent-child exclusion (former section 63.1 / Propositions 58 & 193). Since February 16, 2021, an inherited home keeps its low base only if the child makes it their own primary residence (a family farm can also qualify), and even then a value cap applies to the excess. Otherwise the property is reassessed to market value.

What it means for you: the strategy of inheriting a home and renting it out at the parents' low tax base no longer works. See the Prop 19 (2020) guide, the eligibility quiz, and what happens to property tax after an owner's death.

Homeowners who are 55 or older, severely disabled, or victims of a wildfire or natural disaster can transfer their base-year value to a replacement home anywhere in California, up to three times, under Proposition 19 (superseding former section 69.5 / Propositions 60, 90, and 110). If the replacement costs more, the difference is added to the transferred value.

What it means for you: moving does not have to mean a big tax jump. Estimate a transfer with the Prop 19 calculator, see how this fits with other senior property-tax programs, or read more on transferring your property tax.

Transferring your home into your own revocable living trust (where you remain the present beneficiary) is generally not a change in ownership. Reassessment questions arise when a trust becomes irrevocable, or when a present interest passes to a new beneficiary — at which point the ordinary change-in-ownership rules (and any parent-child exclusion) apply.

What it means for you: a standard revocable living trust for estate planning does not trigger reassessment; what matters is who ultimately receives the property and how they use it.

The joint-tenancy rules turn on the “original transferor.” Creating a joint tenancy in which the original owner is one of the joint tenants is generally excluded; whether a later death triggers reassessment depends on original-transferor status. A separate cotenancy exclusion (section 62.3) can apply when two co-owners hold a primary residence and one dies.

What it means for you: these rules are technical and fact-specific — confirm your situation with the county assessor or an attorney before relying on an exclusion.

Transferring real property into a legal entity in the same proportions as the prior ownership is generally not a change in ownership. But two things do trigger reassessment of the entity's real property: (a) when one person or entity obtains more than 50% control of the entity (section 64(c)), and (b) when the “original co-owners” who first transferred property in cumulatively transfer more than 50% of the entity (section 64(d)).

What it means for you: moving your home into an LLC to “avoid” reassessment is a common misconception — the entity rules have their own triggers, and getting them wrong is costly. Get professional advice first.

If property is substantially damaged or destroyed in a Governor-declared disaster, or taken by eminent domain / government acquisition, the owner can generally transfer the base-year value to a comparable replacement property (Propositions 3, 50, and 171).

What it means for you: a forced move due to disaster or a public taking should not reset your tax base if you replace with a comparable property — but strict rules and deadlines apply.

When a change of ownership or new construction happens mid-year, the county issues a one-time supplemental bill for the difference between the new and old values, prorated for the remainder of the fiscal year. A change between January and May produces two supplemental bills.

What it means for you: the supplemental bill arrives on top of your regular tax and surprises most new owners. Estimate it with the supplemental tax calculator.

For completeness: Proposition 8 (1978) requires the assessor to enroll the lower of your factored base-year value or current market value. When the market falls below your Prop 13 value, your assessment can be temporarily reduced — and later restored as the market recovers.

What it means for you: reassessment can go down as well as up. See Proposition 8 explained and how to challenge your assessment.