Prop 13

A client recently asked me how his property taxes will change if he sells his home and buys another. The quick answer is that as long as the property is a primary residence and in the same county, he keeps his property tax base as set forth in the landmark 1978 ruling. Some counties offer "reciprocity" where they'll allow the original tax base to transer between counties. Home buyers in the past years don't have a clue about Prop 13 as it isn't offered anymore. Who knew home prices would be where they are today back in 1978. Consult your CPA and/or Tax Attorney for specifics. Historically, Proposition 13, officially titled the "People's Initiative to Limit Property Taxation," was a ballot initiative to amend the constitution of the state of California. It was enacted by the voters of California on June 6, 1978. It would eventually be upheld as constitutional by the United States Supreme Court in the case of Nordlinger v. Hahn[1], 505 U.S. 1 (1992). Its passage resulted in a cap on property tax rates in the state, reducing them by an average of 57%. Proposition 13 received an enormous amount of publicity, not only in California, but throughout the United States. Its passage presaged a "taxpayer revolt" throughout the country that is thought to have contributed to the election of Ronald Reagan to the presidency in 1980. Questions? Ask me at www.PTRE.net. Pat Townsley, Mortgage & Real Estate Broker. Toll Free: 800-646-5527