What is the annual inflation factor permitted for local property taxes in California?

The annual inflation factor permitted for local property taxes in California is capped at 2%. This limit is established by Proposition 13, which was enacted in 1978 to control rising property taxes. Under Proposition 13, the assessed value of a property can only increase by a maximum of 2% per year, regardless of the actual rate of inflation or market fluctuations. This ensures that property owners have a degree of predictability regarding their tax burdens. Hence, the correct choice reflects this legislative cap on the annual inflation rate that affects property tax assessments.