California Proposition 13

In 1978 California voters opted for Proposition 13, which limited the property tax to 1% of the assessed value of each property and limited annual increases in assessed values to 2% or the inflation rate (whichever is lower). With the exception that upon the sale of a property, a new assessment would be updated to equal the purchase price of the property.

California Proposition 8

In 1978 California voters also passed Proposition 8, which allowed for a temporary reduction in property taxes when certain conditions are met.  The market value must drop below the Prop 13 taxable value.  When market conditions recover, the taxable value under Prop 13 comes back into play and an increase of more than 2% can occur during that year.  While conditions are poor, it makes sense to save as much as possible on your property taxes.  When home values recover, your opportunity will have be lost.

Prop 8 only helps those who purchased property in late 2004, 2005, 2006, 2007.  If you purchased 5+ years ago, your taxable value is still well below the current value and you do not qualify for a reduction in property taxes.