California, in general, is considered a state with high taxes. So it may surprise you that the property tax rates you are subject to in California, and consequently the Los Angeles County property tax rate, is lower than the national average. However, this refers to the tax rate, not necessarily to the actual amount of money you end up paying. And it has to do with how the taxes are calculated.
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 the single largest property tax you pay.
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.
Thus, if you decide to sell your home in Los Angeles County that you’ve held for, let’s say, 10 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 County 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 what the assessed value of your house is, that new neighbor will be paying higher taxes, but yours 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.
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%.
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% - 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.
No, you cannot lower the LA 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 still remains 1%, but you will be paying less according to how much you managed to lower the assessed value of your home.
It is important to note that if a property was passed from a parent to their child or grandparent to their grandchild, the inheritor may 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 new, more than likely significantly higher, fair market value of the property. Keeping the same basis for the property tax in LA is possible due to Proposition 19 (previously Propositions 58 and 193).
There are certain exemptions to property taxes for Californians, with the most notable being:
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. Because you would be reducing the taxable value of your home by $7 000, you would be paying $70 less annually.
Veterans, currently serving or honorably discharged, may be exempt from up to $4 000. This exemption may also be claimed by an unmarried surviving spouse or the parents of the deceased veteran. Disabled veterans may be eligible for exemptions over $4 000.
Persons over the age of 62, but also blind and disabled persons, 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.
Your LA County property tax bill 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 you do not pay it by December 10; the second installment is due February 1 and is considered delinquent if you do not pay it by April 10. The penalty for delinquent bills is 10%.
You can pay Los Angeles property taxes in person, over the telephone, by mail, with a credit or debit card, or online via eCheck. You can find detailed information on how you can pay your taxes by visiting the Treasurer and Tax Collector website for LA County here.
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 and you won’t be paying any commission or have 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 at your earliest convenience.
If you want to sell fast and are worried about how long the traditional process takes, and the commission and fees involved, consider working with SleeveUp Homes.