California Property Tax Timeline

1974 – Homeowners Exemption

The California Constitution [Article XIII, Section 3(k)] exempts the first $7,000 of the full value of a dwelling occupied as the owner's principal residence on the January 1 lien date from property taxation. For instance, if a principal dwelling has an adjusted base year value of $150,000, it will be assessed at $143,000 after deduction of the homeowners' exemption. The Legislature must reimburse local governments for property tax revenue lost due to this exemption pursuant to Article XIII, Section 25 of the California Constitution. Must file by February 15 preceding the fiscal year (July 1 – June 30) for which the exemption is sought.

Inflated away according to Howard Jarvis Taxpayer Association. Median home price in ‘72 was $34,610. In 2007 HJTA sponsored AB293 unsuccessfully to index the exemption to HPI (housing price index).

1978 - Proposition 13

Limited the ad valorem (value of property) taxes on property to 1 percent of the ‘75-’76 assessed value, which could not be increased any more than 2% per annum.

Property taxes in the state of California have been the subject of controversy for as long as the state has assessed taxes. Before Proposition 13 passed in 1978, property taxes could increase dramatically from year to year based on the assessed value of the home. During the seventies, the real estate market experienced dramatic growth and we all witnessed the rapid escalation in the value of our homes. Because assessors were required to keep assessed values current, property taxes were skyrocketing at a substantial rate. However, increases in the assessed value were not made every year thus resulting in a major tax jolt for homeowners every few years. Since the passage of Proposition 13, a couple of things have happened. The property tax rate was set at a 1% cap. This means that the amount in property taxes you have to pay can only be up to 1% of the assessed value of your home. The assessed value of homes cannot exceed the 1975-76 assessed value and can increase based on the Consumer Price Index (CPI) by no more than 2% per year. If a transfer of ownership takes place or improvements are made, the property will be subject to a reassessment at the current market value. The newly assessed value will then increase on a yearly basis not to exceed 2% per year. The decrease in property taxes as a gross percentage of the assessed value of homes has forced local agencies (cities, counties, and other special districts) to find other sources of funding. These local agencies were given more authority to levy local non-ad valorem property taxes as a result of the passage of Proposition 13; however, the “special taxes” must be approved by two-thirds of the voters. Proposition 13 was intended to protect taxpayers from unanticipated increases in property taxes, to provide effective tax relief, and to require voter approval of tax increases.

1978 - Proposition 8

As of 1978 Revenue and Taxation Code Section 51 requires the assessor to enroll the lower of either the property's Factored-Base-Year Value (established under Proposition 13) or its market value as of the lien date (January 1).

This reduction is temporary and the assessor is required to review the market value of the property each lien date after the reduction until such time as the Factored-Base-Year Value is less than or equal to the market value.

When the Factored-Base-Year Value is again enrolled, the property is no longer subject to the annual review, and will receive indexing not to exceed 2% per year.

1979 - Proposition 79

Low income (<$52,470) 100% disabled veterans tax exemption of basic $150,000, basic $100,000

Any honorably discharge vet with single property less than $5000, married < $10000, probably won’t qualify.

1986 - Proposition 60

On November 4, 1986, the voters of California passed Proposition 60 to provide to qualified homeowners the transfer of the base-year value of their principal residence to a replacement dwelling located in the same county, under certain circumstances. See www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm for details.

1986 - Proposition 58

Effective November 6, 1986, a constitutional amendment approved by the voters of California excludes from reassessment transfers of real property between parents and children. For additional info see http://www.boe.ca.gov/proptaxes/faqs/propositions58.htm#1

1988 - Proposition 90

Proposition 90 expanded Proposition 60 to allow for transfers from one county to another county in California. It is the discretion of each county to authorize such transfers. As of June 5, 2015, the following eleven counties in California have an ordinance enabling the intercounty base year value transfer: Alameda; Orange; San Diego; Tuolumne; El Dorado; Riverside; San Mateo; Ventura; Los Angeles; San Bernardino; and Santa Clara. See www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm for additional information

1990 - Proposition 110

California Proposition 110 was on the June 5, 1990 ballot in California as a legislatively referred constitutional amendment, where it was approved. It authorized the California State Legislature to allow severely disabled homeowners to transfer the value of their existing home to a replacement home, and it excluded from reappraisal any building improvements to an owner-occupied home that were made to enhance the home's level of functionality for a severely disabled person.

1986 – 1995? Proposition 62

Proposition 62 closed some loopholes put in Proposition 13 by the California Supreme Court in the case of San Francisco v. Farrell. Proposition 13 declared that special taxes at the local government level must receive a two-thirds vote of the people. San Francisco contended that special taxes were for special purposes only and that general purpose taxes could be levied without a two-thirds vote. San Francisco authorities pursued this theory by filing a friendly lawsuit against one of its own officials. The Rose Bird-led Supreme Court supported this argument, declaring that while taxes for special purposes required a two-thirds vote, general taxes required no vote at all and could simply be levied by a government body.

Because it was a statute, many lawsuits from government entities tied up Proposition 62 for years. Finally, in 1995 the California Supreme Court declared Proposition 62 to be constitutional. The provisions of Proposition 62 were further strengthened when Proposition 218 passed as a constitutional amendment in 1996.

1996 Proposition 193

Effective March 27, 1996, a constitutional amendment approved by the voters of California excludes from reassessment transfers of real property from grandparents to grandchildren, providing that all the parents of the grandchildren who qualify as children of the grandparents are deceased as of the date of transfer.

1996 - Proposition 218

Over time, bureaucrats would find ways of taxation that ultimately circumvented the requirements of Proposition 13. Local governments have subjected taxpayers to excessive tax, assessment, fee and charge increases that have frustrated the purposes of voter approval for tax increases. As a result of the increasing methods by which local agencies have collected revenue from taxpayers without their consent, Proposition 218 was initiated. Proposition 218 (Article XIIID of the California Constitution) is cited as the “Right to Vote on Taxes Act”. It is an expansion of the people’s initiative power. Under Proposition 218, assessments may only increase with a two-thirds majority vote of the qualified voters within the District. In addition to the two-thirds voter approval requirement, Proposition 218 states that effective July 1, 1997, any assessments levied may not be more than the costs necessary to provide the service, proceeds may not be used for any other purpose other than providing the services intended, and assessments may only be levied for services that are immediately available to the property owners. The measure also specifies that before increasing an existing assessment, local governments must mail information about the levy to every property owner within the District, reject the increase if a majority of the property owners protest in writing, and hold an election on the levy.

2000 - Proposition 37 (defeated)

California Proposition 37 was on the November 7, 2000 ballot in California, as an initiated constitutional amendment, where it was defeated. Proposition 37 came about when Sinclair Paints, a corporation doing business in California, objected to a law enacted by then-Gov. Pete Wilson that authorized the state to collect fees from paint companies to fund a Childhood Lead Poisoning Prevention Program. The California Supreme Court upheld the imposition of the fees as legal under California's existing laws. The vote in the California State Legislature to enact the fees did not reach the 2/3rds threshold that would have been needed, if the fee had been defined as a tax. This background led to the effort, through Proposition 37, to clarify in the California Constitution, which fees imposed by the state legislature should be regarded as taxes and, as taxes, should therefore require a two-thirds (66.67 percent) supermajority vote in the state legislature for enactment.

2010 - Proposition 26

California Proposition 26, or the Supermajority Vote to Pass New Taxes and Fees Act, was on the November 2, 2010 ballot in California as an initiated constitutional amendment, where it was approved. Proposition 26 requires a two-thirds supermajority vote in the California State Legislature to pass many fees, levies, charges and tax revenue allocations that under the state's previous rules could be enacted by a simple majority vote. Supporters of Proposition 26 called it the Stop Hidden Taxes initiative, saying that fees, levies, and so on imposed by the California government amount to taxes, and should therefore require the same supermajority vote required to enact income or sales tax increases.

2014 - AB2231 Property Tax Postponement

On September 28, 2014, the Governor signed AB 2231 (Chapter 703, Statutes of 2014), which reinstates the State Controller's Property Tax Postponement (PTP) Program with some modifications. This program will allow senior, blind, and disabled citizens with an annual household income of $35,500 or less and at least 40% equity in their homes to apply to defer payment of property taxes on their principal residence. The State Controller’s Office (SCO) accepts PTP applications from October 1 to February 10 each year. Go to the SCO website at sco.ca.gov for more information.

Pre 2015 – SB308 Homestead Protection

California protects up to $75,000 for single people, $100,000 for married couples, and $175,000 for people over 65 or legally disabled. In California SB 308 was introduced in early 2015. It initially proposed a $700,000 homestead exemption, regardless of age or marital status. It has recently been amended down to $300,000.

Current Threats to Proposition 13

From Howard Jarvis Taxpayer Association.

See https://www.hjta.org/legislation/major-threats-to-prop-13-and-homeowners/ for a description of these threats.

See other major threats at:
https://www.hjta.org/legislation/legislative-updates/#tab-tab-2567-0-0-1-2567-1

Other Taxpayer Links:

Inland Empire Taxpayers Association - http://ietaxpayers.com/

California Taxpayers Association - http://www.caltax.org/

 

Assembly Constitutional Amendment 4

Lowers vote threshold to 55% for the local imposition, extension or increase of a special tax to fund affordable housing infrastructure..

Senate Constitutional Amendment 6

Allows for special taxes, including sales and parcel taxes, to be approved by local voters with just a 55% vote as opposed to the current two-thirds threshold mandated by Proposition 13.

Senate Constitutional Amendment 3

Lowers the two-thirds vote to 55% for local voters to approve library bonds

Senate Bill 231 (Signed by Brown)

Takes away the ability that voters have under Proposition 218 and the California Constitution to vote on stormwater fee increases.