Prop 13 rolled back assessed values to 1975-76 and capped taxes; the cap rate was?

Prop 13 rolled back assessed values to 1975-76 and capped taxes; the cap rate was?

• A. 0%
• B. 1%
• C. 3%
• D. 2%

Answer: (D)

Prop 13 sets a limit on how quickly property taxes can rise by tying the tax bill to a fixed 1% of assessed value and by restricting annual increases in that assessed value to a maximum of 2% per year (unless there’s a change in ownership or new construction). By rolling back assessed values to the 1975-76 level, it prevents big tax jumps when market values climb. The question asks for the cap on annual increases in assessed value, which is 2% per year. The other numbers don’t fit this limit—the 1% relates to the tax rate itself, not the yearly increase in assessed value, and 0% or 3% don’t reflect the actual cap.

Prop 13 sets a limit on how quickly property taxes can rise by tying the tax bill to a fixed 1% of assessed value and by restricting annual increases in that assessed value to a maximum of 2% per year (unless there’s a change in ownership or new construction). By rolling back assessed values to the 1975-76 level, it prevents big tax jumps when market values climb. The question asks for the cap on annual increases in assessed value, which is 2% per year. The other numbers don’t fit this limit—the 1% relates to the tax rate itself, not the yearly increase in assessed value, and 0% or 3% don’t reflect the actual cap.