The Average Property Tax Rate

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Antonio Gonzalez
USP 120
11 FEB 15
Instructor: Jack McGrory

Proposition 13

Before 1978, the average property tax rate for a home in California was at a little less than 3% of the assessed value of a home. There were no limits on annual increases for the tax rate or on the individual ‘ad valorem’ charges; the taxes based on the assessed value of the property (Stoltman, 2013). During the early seventies the real estate market experienced dramatic growth and there was a rapid escalation in the value of our homes. At this time assessors were required to keep assessed values current. Because of such, 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 (California Tax Data, 2002). Prior to Proposition 13 local agencies could independently establish their tax rates, and make the total property tax rate composite of the individual rates with only few limitations. It was common in the late 1970’s for homeowners to lose their homes due to uncontrolled taxes. Essentially, before Prop. 13 if someone bought a home on a block in the 1950’s for $100,000 and someone else bought a home next door to you for $300,000, your property tax would go up because the assessed value of your home would go up with the new sold value, not with the price you paid for your home. This boom of the 70’s ultimately gave rise to a tax revolt that would aim to

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