By limiting annual increases, Proposition 13 makes property taxes predictable from year to year. This doesn’t just benefit senior citizen homeowners on fixed incomes who worry about losing their homes to the tax collector. It benefits all homeowners. For example, a family who bought their home just five years ago in 2011, at the typical price that year of $286,000, has already seen significant tax savings. Today, the median sales price is close to $509,000 according to the California Association of Realtors. That’s a 79 percent increase. Under the property tax system that preceded Proposition 13, which was based on current value, the family who bought their home in 2011, would see their property taxes nearly double in in a few short years.
Without Proposition 13, that family who struggled to buy a home in the first place, would find themselves struggling to keep their house in an overheated real estate market. Because of Proposition 13, which limits annual assessed value increases to two percent and then applies a tax rate of one percent to the total, the family will pay $3,084 this year, not $5,090, which would be the case if there were no limit on annual increases.
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