The term ‘assessed value’ of your home is the government’s tax value of your property in the public records. Annual property taxes are calculated from the assess value. When you purchase a property, this is an event that triggers a reassessment from the current value. The new assessed value of the property is the purchase price.
Be careful calculating taxes based on what the owner is currently paying. If they have owned the property for a long time, thier assessed value will be less than the purchase price and your new taxes will be higher. Estimate your property taxes as 1.25% of the purchase price.
Your properties assessed value increases by no more than 2% a year . The assessed value 2% limit is set by Proposition 13. A lot of homes in Los Angeles that have been owned for ten, twenty or more years, have much lowered assessed values then their market values. This is because the market value of property in California has risen at a higher rate than 2% a year.
During a market downturns, where the assessed value of your property may temporarily be higher than the market value, you can request a decline in value reassessment by using Proposition 8 that will lower your property taxes.
Proposition 60 & 90 allow you to transfer your tax basis in the property once during your lifetime. This is only for people over 55.