The best way to plan for property taxes in California

Planning for property taxes in California can involve several strategies, and the “best” approach depends on your specific circumstances and financial goals. Here are some key steps to consider:

Understand your taxes:

Base year value: California’s Proposition 13 limits annual property tax increases to 2% of the base year value, which is typically the year you purchased your property. Knowing your base year value helps predict future tax increases.

Tax rate: Each county sets its own tax rate based on local needs. Check your county’s assessor’s office website for the current rate and any upcoming changes.
Additional charges: Beyond the base tax rate, there may be voter-approved charges and special assessments that add to your bill. Review your property tax statements carefully to understand these additional costs.

Budget and anticipate:

Estimate your annual bill: Multiply your current base year value by 2% and add the current tax rate. This gives you a rough estimate of your next year’s property tax bill.
Factor in increases: Expect your property value and tax rate to increase over time, leading to higher bills. Plan for these increases by setting aside additional funds in your budget.
Consider installment plans: Many counties offer installment plans to spread out your property tax payments throughout the year. This can help manage your cash flow.

Explore tax relief options:

Property tax exemptions: Certain property types, including government buildings and places of worship, are exempt from property taxes. Check if your property qualifies for any exemptions.
Elder programs: California offers property tax relief programs for elders over 65 and/or disabled individuals. These programs can freeze or reduce your base year value, leading to lower taxes.
Disaster relief: If your property is damaged or destroyed by a disaster, you may be eligible for property tax relief or postponement.

Additional tips:

Challenge your assessment: If you believe your property’s assessed value is too high, you can file an appeal with your county assessor’s office.
Stay informed: Follow local news and government websites for updates on property tax laws and changes.
Seek professional help: Consider consulting a tax advisor or real estate professional for personalized advice on managing your property taxes.

Remember, planning for property taxes is an ongoing process. By understanding your tax bill, budgeting effectively, and exploring tax relief options, you can take control of your finances and avoid surprises.

Here are some additional resources that you may find helpful:

California State Board of Equalization: https://www.boe.ca.gov/proptaxes/proptax.htm
California State Controller’s Office: https://www.sco.ca.gov/

Click here to download our California property tax calendar.

By taking proactive steps, you can manage your property taxes effectively and protect your financial future in California.