What is the maximum inflation factor that can be applied to property taxes in California?

The maximum inflation factor that can be applied to property taxes in California is capped at 2% per year. This rule is established under Proposition 13, which was enacted in 1978. The proposition limits the annual increase in the assessed value of real property to no more than 2%, regardless of how much the market value of the property increases. This means that even if property values rise significantly due to inflation or market demand, the increase in property taxes for homeowners and property owners can only reflect a maximum increase of 2% each year.

This limitation creates stability for property owners and helps prevent drastic tax burdens associated with rapid increases in property values. It ensures that property taxes remain predictable and manageable over time, making homeownership more affordable for many Californians. Thank you for providing the answer choice as 2%, which aligns with the established provisions of California tax law.