3-2-1 Real Estate Ready: Prop 13 and your actual tax bill

Weekly Newsletter SAMUEL VERA August 26, 2026

This week's three insights from me, two quotes from others, one question to carry with you...

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I.

Your house has two values, and they have almost nothing to do with each other. There's what it would sell for. And there's the number the county taxes you on. Under Proposition 13 the second one is anchored to what you paid, rising no more than two percent a year, no matter what the first one does. Two identical houses on the same street can carry wildly different tax bills. The only difference is when each owner bought.

II.

That anchor holds until the property changes hands. Then the county resets your assessed value to the purchase price and starts the clock over. This is the part that catches buyers. You tour a home, glance at what the seller is paying in taxes, and quietly file it away as your future number. It isn't. If the seller bought decades ago, their bill reflects a purchase from another era. Yours will reflect today's. And that difference doesn't arrive as a surprise letter years later. It shows up as a supplemental bill within months of closing.

III.

So if you're buying, build your budget on roughly one percent of what you're paying, plus whatever local assessments apply, and treat the seller's current bill as trivia rather than a forecast. If you already own, understand that your low assessment is a real asset with a real cost: it's part of why leaving feels expensive, and it deserves a place in the math when you're weighing a move. And if you're thinking about adding someone to title, moving the house into a trust or an entity, or handling a transfer within your family, stop and talk to a professional first. Some of those transfers are excluded. Others reset everything, permanently, in a single afternoon of paperwork. I'm not a CPA or an attorney and none of this is advice about your situation. But knowing the question exists is most of the battle.

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"It's not what you don't know that gets you into trouble. It's what you know for sure that just ain't so."

— Mark Twain

"Be sure you know the condition of your flocks, give careful attention to your herds."

— Proverbs 27:23

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ONE QUESTION TO CARRY WITH YOU:

Do you know what your assessed value actually is, or only what your house is worth?

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Thanks for reading,

Samuel Vera

DRE #01911575