Property Taxes:
Californians Can Thank Proposition 13 for Low Tax Bills

New data released this week from the U.S. Census Bureau shows that on average, while Californians pay much more for their homes than taxpayers elsewhere, Golden State taxpayers reap the rewards of Proposition 13 in the form of lower property tax bills.

In analyzing the Census data on owner-occupied property taxes, Cal-Tax staff found that taxpayers in Dallas, Houston, San Antonio and Austin were taxed at around 2 percent of market value. In the greater metropolitan areas of New York City, Chicago, Philadelphia and Detroit, homeowners were taxed between 1.2 percent and 1.6 percent of full market value.

In contrast, homeowners in Los Angeles, San Diego, San Jose and San Francisco were taxed, on average, between 0.5 percent and 0.6 percent of full market value. If these California homeowners had their property taxes based on full market ad valorem taxes, as do homeowners in most other states, they would be paying more than double the cost of property taxes in most major U.S metropolitan regions.

Nationwide, San Jose homeowners had the highest median home value, at $739,700, but only paid an average of $4,411 in property taxes. Compare this to New York City's median home value of $463,500 and their median tax bill of $5,759. Also, unlike New Yorkers, most California homeowners know what their property tax bill will be before it arrives.

The data released by the U.S. Census Bureau was part of the American Community Survey, which reported averages based on the three-year period between 2006 and 2008. In addition to tax-related data, other information included data on population, demographics, employment, transportation and housing. Cal-Tax staff analyzed the Census Bureau's data on owner-occupied housing to develop comparative findings on median home values and real estate taxes. Data released by the U.S. Census Bureau is not reflective of the current economic recession and market value declines.

Cal-Taxletter, October 30, 2009

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