A California property is reassessed at $950,000 following a change in ownership. Under Proposition 13, what is the maximum amount by which the assessed value may increase in any single subsequent year?
Correct Answer
A) 2% per year, or the California CPI rate, whichever is less
Under California Proposition 13 (California Constitution, Article XIII A), the assessed value of a property may not increase by more than 2% per year or the rate of inflation as measured by the California Consumer Price Index (CPI), whichever is less. The $950,000 reassessment becomes the new base year value, and all future annual increases are capped at this lower-of-2%-or-CPI standard until the next change in ownership or completion of new construction triggers a new reassessment.
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Related Concepts
A bargain and sale deed implies that the grantor holds title and possession of the property but does not include warranties against encumbrances or title defects.
The chain of title is the sequential history of all transfers of ownership for a specific property, from the original source (typically a government patent or grant) to the present owner. An unbroken chain is essential for marketable title.
The closing process, also called settlement, is the final step in a real estate transaction where documents are signed, funds are disbursed, and title is officially transferred from the seller to the buyer.
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A property in Los Angeles County, California, sells for $800,000. The county documentary transfer tax rate is $1.10 per $1,000 of consideration. What is the county documentary transfer tax due at recording?
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A home in a California charter city sells for $1,500,000. The city imposes its own real property transfer tax of $6.80 per $1,000 of value, and the county documentary transfer tax of $1.10 per $1,000 applies in addition to it. What is the total combined transfer tax due at closing?