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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Previous Question
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 San Francisco sells for $1,500,000. Under San Francisco's current transfer tax ordinance, the applicable city transfer tax rate for properties valued between $1,000,000 and $4,999,999 is $6.80 per $1,000 of value, and the California county documentary transfer tax rate is $1.10 per $1,000. What is the total combined transfer tax due at closing?