Under California's Proposition 13, a home purchased for $500,000 has a base property tax rate of 1%. After 3 years with the maximum allowed annual increase of 2%, what is the assessed value of the property for tax purposes?
Correct Answer
A) $530,604
Under Prop 13, assessed value can increase by a maximum of 2% per year. Year 1: $500,000 × 1.02 = $510,000. Year 2: $510,000 × 1.02 = $520,200. Year 3: $520,200 × 1.02 = $530,604.
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Related Topics & Key Terms
Key Terms:
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