Even though real estate prices have soared in the past year — rising by an average of 18.29 percent across the county, according to the market-tracking firm DataQuick — most property owners in San Diego can expect a property-tax increase that barely registers as significant, county assessor Ernie Dronenburg announced on December 11.
California's Proposition 13, passed in 1978, limits the increase in tax on a continuously owned piece of real estate to the lesser of 2 percent per year or an amount equivalent to the current inflation rate. Proponents of the law have long championed it as a means of preventing the elderly from being priced out of their homes; detractors say its primary beneficiaries are large corporate landholders and that the law effectively starves local municipalities of funds.
"I campaigned in 1978 when Proposition 13 passed," said Dronenburg via release. "I support it because it limits value growth and in turn limits the unabated growth in taxes. The inflation rate for 2013 is less than one half of one percent," he continued, stating that property taxes will rise only 0.454 percent for parcels across the county.
Dronenburg said the increase is the second-lowest increase in the law's 35-year history and only the eighth time inflation has lagged the 2 percent threshold.
One segment of the population that may be excluded from the low-rate hike, however, are owners who petitioned the assessor's office during the recent real estate crash to have their properties re-assessed to a value below the base rate established by Prop 13 because they purchased during the bubble period of the early 2000s. Those owners will see their tax base increased back to its original base or to the total current estimated value, whichever is less.
The rate of inflation used is a statewide figure calculated by the California Department of Industrial Relations, which publishes an annual California Consumer Price Index (CCPI), tracking inflation from December 1 of the previous year through November 30.