How to Avoid Property Tax Reassessment in California: Your Complete Guide

California property owners face a tough reality: when your property changes hands, the county assessor can reset your property tax to current market value. For a home purchased decades ago, this often means a massive tax increase that can strain your budget or force you to sell.

But reassessment isn't inevitable. Understanding California's property tax rules—especially after the passage of Proposition 19—can help you protect your low tax base and potentially save thousands of dollars every year.

This guide walks you through everything you need to know about avoiding property tax reassessment in California, from the basics of Prop 13 to advanced strategies that leverage legal exclusions and business structures.

Understanding California Property Tax Reassessment

How Proposition 13 Works

California's property tax system operates under Proposition 13, passed in 1978. This landmark law caps your property tax rate at 1% of assessed value (plus local additions) and limits annual increases to 2%—even when your home's market value soars.

Here's what that means: if you bought a home in 1990 for $200,000, your assessed value today might be around $400,000 after decades of 2% annual increases. But if that same home is now worth $1.5 million on the open market, you're paying property taxes on $400,000, not $1.5 million.

This creates substantial savings. Under Prop 13, your annual property tax bill on that $400,000 assessed value would be roughly $5,000. Without Prop 13 protection, you'd pay around $18,750 on the $1.5 million market value—a difference of $13,750 per year.

What Triggers a Reassessment?

The county assessor resets your property to market value when a "change in ownership" occurs. Common triggers include:

Buying or selling a home: When you purchase property, the assessor sets a new base year value equal to your purchase price.

Gifting property: Transferring property as a gift counts as a change in ownership, triggering reassessment.

Inheritance: When property passes to heirs, reassessment generally occurs unless an exclusion applies.

Adding someone to title: Adding a new owner (except in specific circumstances) can trigger partial or full reassessment.

Major construction: Building additions or significant remodels add new assessed value for the improvements.

What Is a Supplemental Tax Bill?

After a reassessment, you'll receive a supplemental tax bill. This bill covers the difference between your old and new assessed values, prorated for the remaining months in the fiscal year.

Supplemental bills arrive separately from your regular property tax statements and have their own payment deadlines. Missing these deadlines means penalties and interest, so watch your mail carefully after any property transfer or major construction project.

How Proposition 19 Changed California Property Tax Rules

Proposition 19, which took effect on February 16, 2021, dramatically reshaped California property tax law. It replaced the parent-child transfer exclusions from Propositions 58 and 193 with much more restrictive rules.

The Old Rules (Before Prop 19)

Under Prop 58, parents could transfer their principal residence to their children without reassessment, regardless of the home's value. Parents could also transfer up to $1 million in assessed value of other real property (like rental homes or commercial buildings) to their children without triggering reassessment. Two parents could combine their exclusions for $2 million in total assessed value.

These rules created powerful estate planning opportunities. A parent with a $200,000 assessed value on a $2 million home could pass that property to their children, who would continue paying taxes on $200,000 rather than the full $2 million market value.

The New Rules (After Prop 19)

Proposition 19 eliminated most of these benefits. Here's what changed:

Family homes: You can still transfer your principal residence to your child without full reassessment, but only if:

• The child moves into the home and uses it as their principal residence within one year
• The home's fair market value doesn't exceed your factored base year value by more than $1 million (adjusted for inflation)

For 2025-2027, that reassessment exclusion amount is $1,044,586.

Other property: Vacation homes, rental properties, and commercial real estate no longer qualify for any parent-child exclusion. These properties will be reassessed at full market value when transferred to your children.

How the $1 Million Cap Works

Let's break down the math with two examples:

Example 1: Your parents bought their home in 1985 for $150,000. Today it's worth $900,000. Your parents' current assessed value (factored for inflation) is $300,000.

When you inherit the home and move in as your primary residence, you can keep the $300,000 assessed value because $900,000 (market value) is less than $1,344,586 ($300,000 base value + $1,044,586 exclusion).

Example 2: Same purchase price and assessed value, but the home is now worth $2 million.

The market value of $2 million exceeds the protected amount of $1,344,586 by $655,414. This difference gets added to the original $300,000 base, giving you a new assessed value of $955,414—still a break from the full $2 million, but a significant increase from $300,000.

Strategies to Avoid Property Tax Reassessment in California

Using Prop 13 Transfer Exclusions

Even under Prop 19's stricter rules, you can still avoid reassessment through careful planning:

Transfer your primary residence strategically: If you want your children to inherit your home without reassessment, make sure they're prepared to move in as their primary residence within one year of receiving the property.

Consider the $1 million cushion: Properties valued under the base value plus $1,044,586 can transfer without any increase in assessed value—assuming your child lives there.

Document your primary residence: Maintain clear evidence that the property is your principal residence (voter registration, tax returns, utility bills). This helps your children claim the exclusion later.

Structuring Property Through LLCs

For properties that don't qualify as your primary residence, limited liability companies (LLCs) offer a different path to avoiding reassessment.

California law treats LLC ownership differently than individual ownership. When an LLC owns property, changes in the LLC's ownership structure don't automatically trigger reassessment—as long as no single person gains more than 50% control.

Original LLC ownership: If an LLC purchases property initially (not transferred from individual ownership), you can transfer ownership interests over time without triggering reassessment, provided no one person ever controls more than 50%.

Post-purchase LLC transfers: If you transfer property you personally own into an LLC, different rules apply. The assessor tracks cumulative transfers from the original owner. Once cumulative transfers exceed 50%, the property gets reassessed.

This creates planning opportunities. You might transfer 49% of your LLC to your children during your lifetime, then structure your estate plan so the remaining 51% divides equally among multiple beneficiaries at death—keeping any single person under the 50% threshold.

Advanced LLC Strategies

Some families use multiple LLCs in series to systematically transfer property ownership while avoiding reassessment triggers. These strategies require careful execution and professional guidance, but they can preserve substantial tax savings.

The key is working with an attorney who understands both property tax law and business entity structuring. Mistakes in timing, documentation, or ownership percentages can trigger the very reassessments you're trying to avoid.

Timing Your Transfers

For families who missed the February 16, 2021 deadline to complete transfers under the old Prop 58 rules, timing still matters:

Lifetime gifts: Consider whether gifting property during your lifetime makes sense. While this triggers immediate reassessment under current law, it might still be preferable to waiting until death if you expect significant property appreciation.

Coordination with estate planning: Work with your estate planning attorney to structure trusts and other vehicles that align with your property tax goals.

State of residence: If you or your children might move out of California, understand how that affects property tax planning and the value of maintaining a California Prop 13 base.

Common Scenarios That Trigger Reassessment

Home Purchases

When you buy a home, the county assessor sets your assessed value equal to your purchase price. This becomes your new Proposition 13 base year value, which will grow at a maximum of 2% annually (or the inflation rate, whichever is lower) until your next change in ownership.

If you purchase during a market downturn when the home's value subsequently rises, you benefit from locking in that lower purchase price as your tax base.

New Construction and Major Remodels

Adding square footage or making substantial improvements triggers a partial reassessment. The assessor evaluates the new construction at current market value and adds it to your existing assessed value.

Minor repairs and maintenance don't count as new construction. But adding a room, building an accessory dwelling unit (ADU), or completing a major remodel will increase your property tax bill.

The good news: only the new construction gets assessed at current value. Your existing home retains its Prop 13-protected base year value.

Changes in Ownership

Several scenarios create ownership changes that trigger reassessment:

Divorce: Transferring property between spouses as part of a divorce doesn't trigger reassessment, but selling the home and dividing proceeds does.

Adding children to title: Adding your child as a co-owner during your lifetime may trigger reassessment of their ownership percentage, depending on how you structure the transfer.

Trust transfers: Moving property into or out of revocable trusts typically doesn't trigger reassessment if the beneficial ownership doesn't change. But transfers from trusts to beneficiaries after death generally do cause reassessment unless an exclusion applies.

Partnership or corporate transfers: Moving property between individuals and business entities, or between different entities, can trigger reassessment unless the proportional ownership interests remain exactly the same.

How to Challenge a Property Tax Reassessment

When to Consider an Appeal

Not every reassessment is accurate. Consider challenging your assessment if:

• Your property's market value has declined below the assessed value
• The assessor made errors in calculating your property's value
• Comparable properties in your neighborhood have lower assessments
• Environmental factors (wildfire risk, flooding, poor air quality) reduce your property's value
• The assessor incorrectly classified your property

California law allows temporary reductions through Proposition 8 when your property's market value falls below its factored Prop 13 base year value. When the market recovers, your assessed value increases back toward the Prop 13 value—but you pay lower taxes during the downturn.

Documenting Your Case

Strong appeals rely on solid evidence. Gather:

Comparable sales data: Recent sales of similar properties in your area, showing lower values than your assessment.

Property condition reports: Documentation of damage, deferred maintenance, or defects that reduce value.

Environmental impact evidence: Studies, reports, or maps showing wildfire risk, flood zones, or air quality issues affecting your property.

Appraisal reports: Professional appraisals provide expert opinions on your property's true market value.

Photos and videos: Visual evidence of property condition, neighborhood factors, or environmental issues.

Filing an Appeal

Each California county has its own Assessment Appeals Board that hears challenges to property tax assessments. The basic process includes:

1. File your application: Submit your appeal application before the filing deadline, typically between July 2 and November 30 for the current assessment year. Some counties accept appeals year-round for certain circumstances.
2. Pay any required fees: Counties may charge filing fees, though these are often refundable if you win.
3. Prepare your evidence: Organize your documentation and prepare to present your case clearly and concisely.
4. Attend your hearing: Present your evidence to the Assessment Appeals Board. The assessor will also present their position.
5. Receive the decision: The board will issue a written decision, typically within a few weeks to a few months.

If your appeal succeeds, you'll receive a refund for any overpayment plus interest.

Appeal Deadlines and Required Documentation

Missing deadlines is the most common reason appeals fail. Mark these dates on your calendar:

Regular assessment appeals: File between July 2 and September 15 (or November 30 if your county has extended deadlines) for appeals of your regular assessed value.

Supplemental assessments: You have 60 days from the date of the supplemental assessment notice to file an appeal.

Escape assessments: File within 60 days of receiving an escape assessment notice (retroactive assessments for changes the assessor previously missed).

Required documentation varies by county but typically includes:

• The appeal application form
• Evidence supporting your valuation claim
• Photos or inspection reports
• Comparable sales data
• Professional appraisals (if available)

Resources for Property Tax Assistance

Contacting Your County Assessor's Office

Every California county has an assessor's office that handles property tax questions and appeals. In order to lower your property taxes or if you do not agree you have to do the process yourself or hire a consultant. Key counties include:

Los Angeles CountyPhone: (213) 974-3211Website: assessor.lacounty.gov

San Diego CountyPhone: (619) 236-3771Website: sdtreastax.com

Orange CountyPhone: (714) 834-3821Website: ocassessor.gov

Sacramento CountyPhone: (916) 875-0700Website: assessor.saccounty.net

Alameda CountyPhone: (510) 272-3787Website: acgov.org/assessor

Most assessor websites provide online access to:

• Property assessment information
• Tax payment history
• Appeal forms and instructions
• Exemption applications
• Assessment roll data

Using AI-Powered Property Tax Appeal Services

Challenging assessments on your own can be time-consuming and complex. LowPropTax simplifies the entire process through our AI-powered platform.

Here's how we help:

Instant analysis: Our system uses public records and proprietary climate-adjusted valuation models to identify whether your property is over-assessed. You'll know within minutes if you're likely overpaying.

Automated evidence gathering: We automatically compile comparable sales data, climate risk factors (wildfire, flood, air quality), and market trends to build your case.

Expert filing: Our team handles all paperwork, filings, and coordination with the county—saving you hours of work.

Live tracking: Monitor your appeal's progress in real-time through your dashboard, with transparency at every step.

No-risk pricing: You only pay if we successfully reduce your assessment. Learn more about how you can save and check out our pricing.

Take Control of Your Property Taxes Today

California property tax reassessment can mean thousands of dollars in additional annual costs. But with the right knowledge and strategy, you can protect your Prop 13 tax base and potentially reduce an unfair assessment.

Whether you're planning to transfer property to your children, considering an LLC structure for rental properties, or questioning your current assessment, taking action now can lead to significant long-term savings.

Consumer Reports estimates that 40% of property tax assessments contain errors—meaning you might be overpaying without even knowing it. Don't leave money on the table.

Appeal your tax bill now with LowPropTax's AI-powered platform and discover if you're paying more than you should. Our streamlined process takes minutes to start, and you only pay if we save you money.