What California property tax is and who pays it

Property tax in California is an annual tax on real estate — land and buildings — based on the assessed value of the property. You pay it to your county assessor's office if you own a home, rental property, commercial building, or vacant land. The tax funds local schools, fire departments, police, libraries, and other county services.

If you have a mortgage, your lender typically collects property tax as part of your monthly payment and sends it to the county on your behalf. If you own the property outright, you receive a bill directly from the county assessor and must pay it yourself. Renters do not pay property tax directly — the landlord pays it, though the cost is often reflected in rent.

Property tax is one of the largest ongoing costs of homeownership in California. Understanding how it is calculated, when bills arrive, and what happens if you do not pay helps you budget and avoid penalties.

Key Takeaways

  • California property tax is calculated by multiplying your property's assessed value by the tax rate, which is 1% of assessed value plus any voter-approved local taxes.
  • Your assessed value is usually the purchase price when you buy, then increases by no more than 2% per year until you sell, even if market value rises much higher.
  • Property tax bills arrive in two installments per year — typically November and February — and payments are due by December 10 and April 10.
  • If you miss a payment, penalties and interest begin to accrue immediately, and the county can place a lien on your property or sell it at a tax sale after five years of non-payment.
  • Homeowners over 65, disabled persons, and low-income owners may reduce their tax burden through Proposition 13 exemptions or the Homeowners' Property Tax Exemption.

How the assessed value is set and when it changes

Your assessed value is what the county assessor estimates your property is worth for tax purposes. In California, this is almost always the price you paid when you bought it. If you purchased your home for $500,000, that becomes your assessed value, and property tax is calculated from that number.

The assessed value can increase by a maximum of 2% per year, regardless of how much the actual market value of your home rises. This is a result of Proposition 13, passed in 1978. So if your home is worth $800,000 today but you bought it for $500,000 ten years ago, your assessed value is still close to $500,000 plus the 2% annual increases — not $800,000. This is why California property tax bills are often much lower than they would be in other states.

The assessed value resets to current market value only when you sell the property and it changes ownership. A new owner pays tax based on the new purchase price. If you inherit a property, the assessed value also resets in most cases, though some family transfers have different rules.

How the tax rate is calculated

The base property tax rate in California is 1% of your assessed value. So if your assessed value is $500,000, your base tax is $5,000 per year, or about $417 per month if your lender collects it with your mortgage payment.

On top of the 1% base rate, counties and local districts can add taxes that voters have approved for specific purposes — schools, fire protection, flood control, or other services. These additional taxes vary by location. A property in one county might have an additional 0.5% in local taxes, while a property in another county might have 0.8% or more. Your property tax bill shows the base rate and each local tax separately.

To find out what the total tax rate is for a specific address, contact your county assessor's office or check the property tax bill if you already have one. The bill lists every tax component and the total amount due.

When property tax bills arrive and how to pay

California property tax is billed twice per year. The first bill, for the July-December period, typically arrives in November and is due by December 10. The second bill, for the January-June period, typically arrives in February and is due by April 10. Both dates are firm — payments received after these dates are considered late.

You can pay by mail, online through your county assessor's website, by phone, or in person at the assessor's office. If your mortgage lender collects the tax, you do not need to pay directly — the lender handles it. Check your mortgage statement to confirm the lender is paying on time; if they miss a payment, you can be held responsible for penalties even though you paid the lender.

Some counties offer installment plans or payment arrangements if you cannot pay the full amount by the due date. Contact your county assessor immediately if you are having trouble paying — waiting until after the deadline triggers penalties and interest.

Penalties and what happens if you do not pay

If your property tax payment is late, the county adds a 10% penalty to the unpaid amount. Interest also begins to accrue at a rate set by the state, currently around 1.5% per month (18% per year), though this rate changes annually. These charges compound, so the longer you wait, the more you owe.

If you do not pay for five years, the county can hold a tax sale and sell your property to recover the unpaid taxes, penalties, and interest. Before that happens, the county will send notices and may place a lien on your property, which prevents you from selling or refinancing until the debt is paid. The lien is a public record and affects your credit.

If you receive a notice that your property is in tax default, contact your county assessor or a tax professional immediately. Some counties offer payment plans or temporary relief for hardship situations, but you must act before the sale date.

Exemptions and reductions for certain owners

California offers several ways to reduce property tax if you meet certain conditions. The Homeowners' Property Tax Exemption reduces the assessed value of a primary residence by $7,000 for most owners. This means if your assessed value is $500,000, it becomes $493,000 for tax purposes, saving you about $70 per year. You must own and occupy the home as your primary residence to claim it.

Homeowners age 65 and older, disabled persons, and parents of children with severe disabilities may be able to postpone property taxes through the Property Tax Postponement Program. This program allows you to defer payment until you sell the home or pass away, though interest accrues. You must meet income limits and own the home outright or have significant equity.

Veterans with service-connected disabilities, surviving spouses of deceased veterans, and certain other groups may receive exemptions that reduce or eliminate property tax entirely. may be able to access varies by disability rating and other factors. Contact your county assessor to learn which exemptions you might may have access to for and what documents you need to submit.

Frequently Asked Questions

Can I appeal my assessed value if I think it is too high?

Yes. You can file a Proposition 8 appeal with your county assessor if you believe the assessed value does not match the market value of your property. You typically have 30 days from when you receive your bill. Bring evidence such as recent appraisals, comparable sales in your area, or photos showing damage or needed repairs. The assessor will review and may lower the value.

What happens to property tax if I refinance my mortgage?

Refinancing does not change your property tax. The assessed value stays the same because you are not selling the property — you are just changing your loan. Property tax is tied to ownership, not to the mortgage itself. Your new lender will still collect property tax as part of your monthly payment.

Do I have to pay property tax on a second home or investment property?

Yes. Property tax applies to all real estate you own in California, including vacation homes, rental properties, and vacant land. Each property is assessed separately. If you rent out a property, you can deduct the property tax as a business expense on your income taxes, but you still owe the full amount to the county.

What if I inherit a house — do I have to pay the new assessed value right away?

Not always. If you inherit from a parent or grandparent and the property is your primary residence, you may be able to keep the lower assessed value under Proposition 19. If you inherit from someone else or the property is not your primary residence, the assessed value resets to market value. Consult a tax professional or your county assessor about your specific situation.

Can I get a property tax refund if I overpaid?

Yes, but only if you actually overpaid — for example, if your lender sent an extra payment by mistake or if your assessed value was reduced on appeal. You must file a claim with your county assessor within the time limit, which varies by county. If you are owed money, the county will issue a refund or credit it toward future taxes.