How Much Is Property Tax In California
Owning property in California can be a strong financial asset, but understanding how you're taxed on it is essential. With property values rising and tax codes evolving, especially in 2025, staying informed isn’t optional- it’s financially crucial. If you're a homeowner, investor, or planning to buy property in California, this in-depth guide will break down how property taxes work, what changes have taken effect, and strategies to minimize what you owe.
What Are Property Taxes in California?
California property tax is a levy imposed by local governments on real estate holdings. These taxes help fund public schools, fire departments, infrastructure maintenance, libraries, and essential community services.
The amount you pay depends primarily on the assessed value of your property, which is subject to certain limitations and possible exemptions.
Key Governing Law: Proposition 13
Passed in 1978, Proposition 13 caps the general property tax rate at 1% of the property’s assessed value and restricts annual increases in assessed value to 2%, unless there’s a change in ownership or new construction.
How Are Property Taxes Calculated in California?
Calculating your property tax is relatively straightforward, but understanding what influences that calculation is where most property owners go wrong.
Here’s the core formula:
Assessed Value × Base Rate (1%) + Local Levies & Special Assessments = Total Annual Property Tax
Example: Calculating Property Tax
Property Purchase Price $600,000
Base Tax (1% of Assessed Value) $6,000
Local Voter-Approved Taxes (0.2%) $1,200
Note: Your assessed value can only increase by 2% annually unless a reassessment is triggered.
To learn more about how deductions apply to property tax, visit our guide on How Much of Your Property Taxes Are Tax-Deductible.
What’s New in 2025?
While Proposition 13 remains intact, 2025 brings adjustments property owners must be aware of:
Higher Local Levies: Many counties, including Los Angeles and San Francisco, have introduced new voter-approved bonds for schools and transit projects.
Increased Home Values: Reassessments due to ownership transfers or renovations are now affecting more properties due to inflated market prices.
Digitization of Tax Appeals: Counties are modernizing their appeals systems, making it easier but also more competitive to file a successful claim.
Average Property Tax Rates by California County (2025
County Avg. Tax Rate Median Home Price
Los Angeles 1.16% $790,000
Orange 1.12% $920,000
San Diego 1.14% $840,000
San Francisco 1.18% $1,300,000
Sacramento 1.08% $560,000
While the 1% base rate applies statewide, each county's additional assessments can dramatically alter your final tax bill.
Common Property Tax Exemptions You Should Know
Understanding the exemptions available to you is a vital strategy to reduce your tax burden.
1. Homeowner’s Exemption
Reduces the assessed value of a primary residence by $7,000, saving approximately $70 annually.
2. Disabled Veterans’ Exemption
Offers property tax relief to qualified disabled veterans. The amount varies based on income and disability rating.
3. Senior Citizens’ Property Tax Postponement Program
Allows eligible senior citizens to defer payment of property taxes under specific income and equity conditions.
4. Nonprofit and Religious Organization Exemptions
Properties used exclusively for qualifying purposes may be exempt entirely.
Why Do Property Taxes Go Up?
Although Proposition 13 restricts annual value increases, several triggers can cause your property tax to rise sharply:
Change in Ownership: Purchasing or inheriting a property triggers a reassessment at current market value.
New Construction or Renovation: Major improvements can raise your property’s assessed value.
New Local Levies: Voter-approved measures for infrastructure, schools, or transportation projects.
How to Lower Your Property Tax Bill in 2025
If you're looking to reduce what you owe, here are several expert-backed strategies:
1. File an Appeal:
If you believe your assessed value is too high, submit an appeal with supporting data. This is especially relevant if your property value decreased or was overvalued.
2. Avoid Unnecessary Improvements:
Extensive renovations can prompt reassessment. Consider whether the value added justifies the long-term tax impact.
3. Apply All Eligible Exemptions:
Many homeowners forget to claim exemptions they're entitled to. Review your eligibility each year.
4. Consult an Expert:
Working with a CPA or licensed tax professional can reveal savings opportunities you might overlook.
Interested in choosing the right professional? Explore our guide on How to Choose the Best Tax Preparation Service in the U.S.
When Are California Property Taxes Due?
California uses a biannual tax cycle:
1st Installment Due: November 1 (Delinquent after December 10)
2nd Installment Due: February 1 (Delinquent after April 10)
Failing to pay on time results in a 10% penalty on the unpaid amount. Continued delinquency may result in a tax lien or, in extreme cases, foreclosure.
Can You Deduct California Property Taxes?
Yes, under federal tax law, state and local property taxes can be deducted on your federal return if you itemize. However, the IRS places a cap on total state and local tax (SALT) deductions, currently set at $10,000.
Visit our full blog on How Much of Your Property Taxes Are Tax-Deductible for complete guidance.
Conclusion
California’s property tax system isn’t just about numbers, it's about knowing how those numbers work for or against you. With home values rising, regulations evolving, and local assessments increasing in 2025, your best move is to take control.
At Zuazo & Associates, we provide detailed property tax planning and appeal support, ensuring you don’t overpay and your investments remain protected. From calculating sales tax for your business to minimizing real estate liabilities, our team is here to guide you.
Learn more about how to stay compliant and financially smart by checking out our post on How to Calculate Sales Tax.
Let’s make California property taxes work for you,not against you. Contact us for a personalized consultation today.
Zuazo & Associates – Expert Accounting, Tax Planning & Financial Consulting in California