A California home is sold, triggering a Proposition 13 reassessment. The new purchase price is $900,000. The previous owner's assessed value was $400,000. How much more per year will the new owner pay in base property tax compared to the previous owner?
Correct Answer
C) $5,000
Previous owner's annual tax = $400,000 × 1% = $4,000. New owner's annual tax = $900,000 × 1% = $9,000. Difference = $9,000 − $4,000 = $5,000.
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Previous Question
A California real estate instructor is explaining Proposition 13 to students. All of the following statements about Prop 13 are correct EXCEPT:
Next Question
Under Proposition 19 (effective February 2021), a parent transfers their primary residence to their child. The home has an assessed value of $200,000 and a current market value of $900,000. The child does not occupy the home as their primary residence. What is the property tax consequence?