How Is the Los Angeles Property Tax Rate Determined?

California, in general, is considered a state with high taxes. So, it may surprise you that the property tax rates in California, and consequently the Los Angeles property tax rates, are actually lower than the national average. However, this refers to the tax rate, not necessarily the actual amount of money you end up paying. And it has to do with how the taxes are calculated.

Nestled as the sprawling heart of California, Los Angeles County reigns as the largest county, bustling with vibrant communities and endless possibilities. Whether you're a seasoned property owner or dream of owning land within its bounds, grasping the ins and outs of the Los Angeles property tax rate is crucial for navigating the realm of real estate finance.

Continue reading to learn all about Los Angeles property tax rates and calculations – what they are and how to calculate yours.

How Is the Property Tax Rate Determined in California?

In the state of California, financial obligations related to residential property taxes are determined based on specific rules and regulations. Proposition 13 is a law that was approved by California voters in 1978 and plays a significant role. It has two key features:

• General Property Tax Limit: General property taxes (excluding those for special purposes) are limited to 1% of a property’s market value.
• Assessed Value Increase Cap: Increases in assessed value are restricted to 2% per year. This means that even if the market value of your property rises significantly, your assessed value won’t increase more than 2% annually.

Below is a table with information about effective tax rates and average annual property tax payments for some counties in California for 2024. You can always check the LA County tax website to see your property's actual property tax rate for the current year.

What About Commercial Properties?

In California, commercial properties are also primarily taxed at a foundational rate of 1% of their assessed value, based on Proposition 13, dictating the percentage of property taxes. However, there has been a recent proposal called Proposition 15. If passed, it would amend the California State Constitution to require industrial and commercial property owners (except agricultural) to be taxed based on real estate market value, eliminating the benefit of protection under Prop 13. 

This concept is known as the “Split Tax Roll”. Under Prop 15, commercial properties would be reassessed based on their then-market value, and the 2% maximum annual property tax increase protection under Proposition 13 would no longer apply. Commercial leases allow landlords to “pass through” any additional tax increases to tenants during the lease term. 

Therefore, if Prop 15 passes, future tax increases would directly affect commercial tenants, especially those in triple net leases, where tenants pay their share of the building's operating expenses.

Mello-Roos Taxes for Community Development

Mello-Roos is a California special tax district that plays a crucial role in financing new or additional public services and facilities within specific boundaries. These special districts are officially known as Community Facility Districts (CFDs). 

Mello-Roos districts sell bonds to raise funds for essential infrastructure projects such as roads, schools, parks, police services, and other amenities desired by the community. When voters within a CFD authorize the sale of bonds, the district gains the ability to levy additional tax rates on its residents used to pay off the bond principal, interest, and administrative fees.

Mello-Roos was introduced as a workaround to Proposition 13, which restricted local governments from increasing property taxes based on property value. Unlike traditional property taxes, Mello-Roos assessments are not based on property value but are uniformly applied across all properties within the district. As a result, Proposition 13 restrictions do not apply.

Unfortunately, Mello-Roos taxes are not tax-deductible on California income tax returns. California tax law does not exempt non-ad valorem taxation, meaning that taxes or assessments not based on home value are not eligible for deductions.

How Is the Los Angeles Property Tax Rate Calculated? Financial Planning 101

Pursuant to Proposition 13, an amendment to the California Constitution enacted in 1978, you pay in general property taxes no more than 1% of the assessed value of your home at the time of purchase (the base year value) with added annual increases to the assessed value (the factored base year value), but the added value is capped at 2% yearly. This is your single largest annual property tax bill.

When you purchase personal property, whether it's a family home, a vacation home, or a rental home, the assessed value is initially set equal to the purchase price. Each year, the assessed value increases based on the rate of inflation, which is determined by changes in the California Consumer Price Index. Due to the 2% cap on increases, long-term homeowners or those in areas with rapid price growth may find their assessed value lower than the market value.

How Much Is the Property Tax on a $ 300,000 house in California?

The property tax on a $300,000 house in California depends on the county where the property is located. As of April 2024, Los Angeles County property tax rate is at an average of 0.72%. So, an average homeowner with an assessed property value of $ 300,000 will pay $2,160 annually in property taxes.

As of April 2024, the average home price in LA County is $871,794, which means that LA homeowners will pay an average of $6,277 in annual property taxes in the current market.

How Is Taxable Property Assessed in Los Angeles County?

The County Assessor determines the value of your property at the time of purchase – the base year value, which is usually the purchase price unless the price significantly differs from its market value. From there, the assessed value of your home increases annually according to the inflation rate, as measured by the California Consumer Price Index, but is capped at 2%.

This means that the fair market value of your home is usually higher than the assessed price because the 2% cap increase doesn’t follow the true increases in market value. However, a new assessment will be performed if there is a change in ownership or significant improvements are made to the property.

How Did Proposition 13 Help Los Angeles Homeowners with Property Taxation?

If you decide to sell your home in Los Angeles County that you’ve held for, let’s say, ten years and buy a less expensive home in another county, your property tax could actually be higher. This is because the new value assessment will be more in line with the actual market value, so 1% of the value of your new home could be higher, as there was no 2% cap.

On the other hand, your Los Angeles property tax rate is not related to or dependent on your neighbors’. So, if a house comparable to yours is sold in your neighborhood for $100,000 more than your house's assessed value, that new neighbor will pay higher taxes, but yours will stay the same. This may seem obvious now, but it was not so before Proposition 13 was passed.

For one, the average property tax in California was 3%, but that was the lesser problem. The bigger issue was that there was no cap on the annual increases. So, as the value of property appreciated and a new house was sold in your neighborhood for a significantly larger sum than what you paid, you could expect a new assessment that would also increase your LA County property tax payments.

The situation got so bad in the 1970s that people were forced to sell their homes or lose them as a result of the tax increases. This was one of the main driving forces behind Proposition 13, and now, luckily, the Los Angeles County property tax rate increase is capped at 2%.

Additional Los Angeles County Property Tax Rates

Aside from the 1% property tax, you pay other levies. While these levies are not strictly defined as property taxes under the law, you still pay them on your property tax bill. These levies are voter-approved and usually apply to homes in special and school districts. The levies are dependent on the district your home is located in and the local regulations.

The school district tax is the largest of these additional levies and typically ranges between 0.16% and 0.2%. Then, you have levies that you pay to your municipality (e.g., the city of Los Angeles imposes a levy in the range of 0.02% – 0.03%). You may pay additional taxes or levies based on where you live, but these are the main ones.

Can You Lower Your Los Angeles Property Tax Rate?

No, you cannot lower the Los Angeles County property tax rate. However, you can challenge the assessed value of your home. If you manage to lower the assessed value of your home, the tax rate will still remain at 1%, but you will be paying less according to how much you have managed to lower the assessed value of your home with new property assessments.

Tax Exemptions

There are certain exemptions to property taxes for Californians, including the Los Angeles property tax rate, with the most notable being:

• Homeowner’s Exemption
• Veteran’s Exemption
• Senior Citizens Property Tax Assistance

If you meet the requirements, tax exemptions can greatly decrease the amount you owe in taxes, that is your tax liability.

1. Homeowner’s Exemption

You can claim a $7000 exemption from the taxable value of your home. To qualify, the property needs to be your primary residence and you must make a filing with the county assessor. This reduces the assessed value by $7,000, saving at least $70 per year.

Overall, California’s average effective property tax rate is 0.71%, which compares favorably to the national average of 0.99%. Proposition 13 helps keep property taxes manageable for residents, contributing to the state’s appeal for homeowners.

2. Veteran’s Exemption

Veterans currently serving or honorably discharged may be exempt from up to $4,000. An unmarried surviving spouse or the parents of the deceased veteran may also claim this exemption. Disabled veterans may be eligible for exemptions over $4,000.

The Disabled Veterans' Exemption is available to disabled veterans with a service-connected disability of 100% or more. The exemption amount varies depending on the veteran's level of disability and can be up to $250,000.

3. Senior Citizens Property Tax Assistance

Persons over the age of 62, as well as persons with vision impairments and disabilities, are eligible to receive cash reimbursement for property taxes. While persons who qualify are not exempt from paying taxes, they are awarded assistance based on household income in lieu of tax exemptions.

Inheriting a Home and Keeping the Same Tax Basis

It is important to note that if a property was passed from a parent to their child or grandparent to their grandchild, the inheritor might apply to keep the same tax basis in certain situations. In practice, this means that the inheritor will not need to pay taxes based on the real property's new, more than likely significantly higher, fair market value. 

Keeping the same basis for the Los Angeles property tax rate is possible due to Proposition 19 (previously Propositions 58 and 193). Check out our guide to inheritance tax in California for more details.

Tax Deadlines in LA County

Your Los Angeles County property tax bill has two payment stubs and, thus, can be paid in two installments. You will usually get the bill in October.

• The first installment is due November 1 and is considered delinquent if not paid by December 10.
• The second installment is due February 1 and is considered delinquent if not paid by April 10.

The penalty for failure to meet these deadlines for property tax bills is 10%. So, ensure you keep up with your financial responsibilities. Make sure you always attach the payment stub regardless of the type of payment and write your Assessor's Identification Number along with the Year/Sequence Number on your check.

Where Can You Pay Taxes?

The Internal Revenue Service (IRS) collects federal taxes in the US, while state tax collectors collect state-level taxes. Additionally, county or municipal tax collectors may collect taxes at the local level.

In California, homeowners can pay their property taxes at their county tax collector's office. Each county has its own tax collector's office, which is responsible for collecting property taxes, issuing tax bills, and enforcing tax collection laws.

Additionally, Los Angeles County offers online card payment options for property taxes, allowing homeowners to pay their taxes electronically from the convenience of their home or office using their credit cards, debit cards, or electronic checks.

Are the Los Angeles Property Tax Rates Too High For You?

If the property taxes you pay on your property are causing you financial distress, you can consider selling your home to finance a more affordable one. SleeveUp Homes buys houses in LA County for top dollar.

We are not wholesalers, flippers, or realtors, so we will always make you a fair offer. You won’t pay any commission or have any closing costs. And as we do all repairs ourselves, you can sell as-is and not worry about remodeling and renovations.

Contact us to request a cash offer, and we will send a team to assess your home as soon as possible.

Author:

Zachariah Peterson , CMO /

Zach has broad experience in marketing, technology, and finance, and he has held leadership positions at multiple startups since 2017.

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