By Jennifer Berger
2026 President
Santa Barbara Association of Realtors
Every so often, a familiar complaint bubbles up: “Why does my neighbor pay a few thousand dollars a year in property taxes while mine is in the tens of thousands?” It sounds unfair at first blush. But that reaction usually skips an important fact: TIMING. And timing is exactly what Proposition 13 was designed to address.
Before Proposition 13 passed in 1978, California homeowners lived with constant uncertainty. Property taxes were based solely on current market value, reassessed frequently, and there was no meaningful limit on how fast those taxes could rise. In the 1970s, home values surged across the state. For many homeowners, especially seniors and working families, tax bills skyrocketed even though their incomes did not. People who had done everything “right” suddenly faced the very real possibility of being taxed out of their homes.
Proposition 13 was the voters’ response to that instability. At the heart of the law, it did three simple but powerful things. First, it capped the property tax rate at one percent of assessed value. Second, it limited annual increases in assessed value to no more than two percent per year. Third, it reset the assessed value only when a property changed ownership.
Proposition 13 also ensured predictability for taxpayers while still providing a stable base for funding essential local services, including schools, fire protection, and public infrastructure.
That last point is where most of today’s confusion comes from. When you buy your home, your property taxes are based on what you paid for it. From that point forward, the increases are limited, year after year. If your neighbor bought the same house decades earlier, that neighbor’s tax bill reflects their purchase price, not today’s market value. The system may look unequal in a snapshot, but over time it evens out. Ten years from now, you will be the one paying “less than the new neighbor.” That protection moves with each homeowner.
This is why many people describe Proposition 13 as a contract between homeowners and the state. You agree to buy a home at a certain value, and in return, the rules don’t change underneath you. You can plan. You can budget. You can stay. And the state must abide by that contract.
The certainty of that contract matters more now than ever before. Housing costs are already high, and property taxes are not something a homeowner can negotiate away or refinance. Without Proposition 13, rising values alone could force families out of homes they still own and maintain. That’s not theoretical, it happened before 1978, and it’s why voters acted decisively.
None of this means the system is perfect, or that conversations about tax policy should be off-limits. But it does mean we should be honest about what Proposition 13 actually does. It doesn’t provide a special exception; it provides long-term predictability. Once you buy, you’re protected from unpredictable spikes, and the rules are clear going forward.
That stability has helped generations of Californians put down roots, stay in their communities, and pass homes on to the next chapter of owners, who receive the same deal in turn. In a state where housing is already hard enough, that kind of certainty isn’t a loophole. It’s a safeguard.
In California, stability in homeownership isn’t a luxury, it’s a necessity.
Jennifer Berger is a top producing, third generation California REALTOR® with Compass, bringing 28 years of experience in residential real estate, serving Santa Barbara and its surrounding communities. She currently serves as President of the Board of Directors for the Santa Barbara Association of Realtors. She can be reached at 805-451-5484 or jennifer.berger@compass.com.
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