California’s Proposition 13 cuts Bay Area homeowners’ property tax bills by up to tens of thousands of dollars a year. But in some parts of the region, the average homeowner isn’t benefiting quite as much as they once did.
The law saved San Francisco homeowners an average of roughly $9,000 in property taxes in 2025, according to a Chronicle analysis of data provided by real estate company Redfin. The city’s average home value was nearly $1.6 million that year, according to the brokerage, but its average assessed value — used to calculate homeowners’ tax bills — was just over $1 million.
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San Francisco isn’t the only county that saw the average Prop 13 subsidy shrink over the eight-year period. In six of the nine Bay Area counties, the gap between the average home’s market value and its assessed value became smaller from 2017 to 2025. Data for the 2026 tax roll was not available, but since San Francisco home values have seen a sharp rise this year, the gap likely increased.
There were some exceptions to the trend, such as in Santa Clara County. In Cupertino, the gap grew from $1.2 million in 2017 to $1.5 million in 2025. The latter year, Prop 13 helped city homeowners shave off an average of more than $29,000.
Adopted by California voters in 1978, Prop 13 sets property taxes at 1% of the value it had the year its owner purchased it, plus any local voter-approved increases to the rate. That assessed value can only increase by 2% a year, resulting in much lower tax bills for property owners who hold on to their asset as its true value swells.
While the law remains broadly popular in California, some housing experts argue it causes many older Californians to stay in homes with more space than they need, resulting in more buyer competition over fewer listings. (A 2021 reform allows some homeowners to take their tax break with them when they move).
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