Proposition 13 Explained

Updated August 2025 · By Forrest Heath

Proposition 13, passed in 1978, reshaped California’s property-tax system. It capped the general property-tax rate, limited annual assessment increases, and typically reassesses at market value upon sale or transfer. For many homeowners this created stability; it also changed how local governments fund services.

A Personal Look Back

I remember how strongly my family believed in the Jarvis–Gann Initiative. Back then, uncertainty around property taxes made homeownership unpredictable. Prop 13 brought stability for many long-time California homeowners, including families here in the Modesto area.

What Did Prop 13 Actually Do?

Practical Effects I See as a Broker

For long-time owners, predictable taxes can support staying in place for decades. For buyers and sellers, reassessment at sale is a key factor in monthly payments. These realities affect supply, demand, and affordability in the California Central Valley.

How Cities Make Up for Limited Revenue Growth

Because Prop 13 limits how fast property-tax revenue can grow, many communities rely on other tools to fund services and infrastructure. One common mechanism is the Mello-Roos special tax, used primarily in newer developments.

What Is Mello-Roos?

Mello-Roos districts allow new communities to fund infrastructure and services—such as roads, water and sewer, parks, schools, and public safety—without relying entirely on the city’s general fund.


Final Thoughts

Prop 13 remains central to how California homes are owned, sold, and taxed. If you’re considering a move in Modesto, Ripon, Oakdale, Turlock, or anywhere in the Central Valley, I’m happy to walk through how Prop 13 and local taxes may affect your decision.

Have questions? Contact Forrest Heath · Related reading: Mello-Roos explained