Prop 13 and 94611: What Your Property Tax Bill Actually Looks Like

Buy a $1.5 million home in 94611 and your property tax bill resets to roughly $19,200 a year on day one: the 1% base levy plus about $4,200 in voter-approved bonds and assessments that ride on top of Prop 13's famous cap. A one-time supplemental bill for the gap between the seller's old assessed value and your price lands months later. The Desk's verdict: the bill is bigger than the 1% shorthand suggests, the 2% cap only protects you after you buy, and the homeowner's exemption saves about $90 a year. Here is the full math.

The reset: your assessed value becomes your price

California voters passed Proposition 13 in June 1978, and its core mechanics have not changed since. Three rules run the whole system, per the State Board of Equalization: the ad valorem tax is capped at 1% of assessed value (plus voter-approved bonds), assessed value can grow no more than 2% a year (the lesser of inflation or 2%), and the property is reassessed to current market value when ownership changes or new construction is completed. (BOE State Assessment Manual; BOE Property Tax Legislative Bulletin, 2023.)

The practical translation for a buyer: on closing day, your assessed value becomes your purchase price. The seller's decades of 2%-capped growth do not transfer to you. That is the "welcome stranger" effect the tax literature names openly: two identical houses on the same street can carry wildly different tax bills because one was bought in 1998 and the other in 2026.

The worked example: $1.5 million in 94611

The 1% cap is the part everyone quotes. The rest of the bill is the part that surprises people. Oakland Hills parcels sit in tax rate areas where voter-approved bonds and assessments stack on top of the 1% base. A recent Oakland breakdown for the 2026-27 tax year (PropertyShark) shows where the extra 0.2779% goes:

About $19,170 a year, or $1,597 a month, before insurance and before the mortgage. Tax rate areas vary by address, so treat this as the hills planning figure and confirm your parcel's exact rate on the tax bill. The shape holds across 94611: the base is $15,000 and the bonds add roughly another $4,200.

What the 2% cap actually buys you

The cap does nothing for you in year one. It starts paying the day after you buy. Run the illustration: a $1.5 million purchase, assessed value compounding at the 2% maximum, market value compounding at 5%.

• Year 10 assessed value: about $1,828,500. Year 10 market value: about $2,443,300.
• Annual tax on the assessed value at 1.2779%: about $23,366. If the tax were levied on market value: about $31,223.
• The cap saves about $7,857 in year ten alone, and the gap widens every year the market outruns 2%.

That is the honest version of the Prop 13 pitch: it is a long-hold subsidy, not a move-in discount. The buyer who stays twenty years builds an enormous wedge between assessed and market value; the buyer who sells in three captures almost none of it. And the protection only runs one way while values rise. If market value falls below your assessed value, you can request a temporary decline-in-value reassessment (the Prop 8 review), though the bar is documented comparable sales near the January 1 lien date, not an automated estimate.

The supplemental bill: the surprise that is not in escrow

Because the assessor reassesses on your closing date but the regular tax roll was set on the prior January 1 lien date, the county bills you for the difference. This is the supplemental assessment: the gap between the seller's old assessed value and your new one, prorated from the month after closing through June 30, the end of the fiscal year.

The example the Desk uses with every buyer: the seller bought decades ago and carries a $600,000 assessed value; you pay $1.5 million. The $900,000 gap, taxed at 1.2779%, is $11,501 for a full year. Close in mid-October (effective date November 1, proration factor 0.67) and the bill is about $7,706.

Three things make it a surprise. First, timing: the bill can arrive anywhere from three weeks to more than six months after closing, long after the move-in dust settles. Second, routing: it is mailed directly to you, and in general it is not paid from your mortgage impound account, so check with your servicer rather than assuming the monthly payment covers it. Third, the calendar trap: buy between January 1 and May 31 and you get two supplemental bills, one for the stub of the current fiscal year and one for the full next year.

The exemptions: file the one that matters

The homeowner's exemption knocks $7,000 off your assessed value. At the 1% base rate that is the famous $70 a year; at hills effective rates near 1.28% it is about $89. It is not automatic: file Form BOE-266 with the Alameda County Assessor, by February 15 for the full year's benefit (by December 10 for 80%), and it renews on its own until you sell or move. A 2024 Los Angeles County Assessor report found one in three homeowners there had never claimed it, which tells you how many buyers never hear about it.

The bigger lever belongs to older sellers, and it matters for hills move-up math. Proposition 19, approved by voters in 2020 and effective April 1, 2021, lets homeowners 55 or older (or severely and permanently disabled, or victims of qualifying disasters) carry their existing base-year value to a replacement primary residence anywhere in California, up to three times, when the replacement is bought within two years of the sale. Buy for equal or less and the low basis transfers whole; buy for more and only the difference is added to the basis. (BOE Proposition 19 guidance.)

The calendar: two installments, two hard dates

Alameda County's fiscal year runs July 1 to June 30, and the secured tax bill comes in two installments: the first due November 1 and delinquent after December 10, the second due February 1 and delinquent after April 10. Miss a delinquency date and a 10% penalty attaches; if a date falls on a weekend, you get until 5 p.m. the next business day. These are the county's dates, not your lender's, and they apply to the regular secured bill. Supplemental bills run on their own delinquency schedule, printed on the bill.

Putting it in the offer math

Now stack it. A $1.5 million purchase with 20% down is a $1.2 million loan; at the 7.40% level rates have held since early October (Freddie Mac's October 15 survey: unchanged at 7.40%), principal and interest run about $8,309 a month. Add about $1,597 in property tax and the hills insurance picture our fire insurance guide tracks, and the tax line alone is about one-sixth of the combined principal, interest, and tax payment. That is why the Desk treats the property tax bill as an offer input, not a closing surprise: it reprices what you can bid before you write it. Our jumbo-loan guide covers the financing side of the same math at these price points.

FAQ

Is Oakland Hills property tax really just 1%?

No. Prop 13 caps the base levy at 1% of assessed value, but voter-approved bonds and assessments in Oakland tax rate areas add roughly another 0.28%, putting the typical hills effective rate near 1.28%. On a $1.5 million assessed value that is about $19,170 a year, not $15,000. The exact rate varies by tax rate area; your tax bill states it.

When will the supplemental bill arrive?

Anywhere from three weeks to more than six months after closing, mailed directly to you. It is generally not paid from your impound account, so confirm with your servicer. If you bought between January and May, expect two bills.

Does the homeowner's exemption renew every year?

No new filing is needed after the first one. File Form BOE-266 once with the Alameda County Assessor and it stays until you sell or the home stops being your principal residence.

Why does my neighbor's identical house pay less tax?

Because they bought earlier. Prop 13 reassesses to market value on sale and then caps growth at 2% a year, so a 1998 purchase carries a fraction of your 2026 assessed value. The system taxes purchase timing, not the house.

Can my assessed value ever go down?

Temporarily, yes. If market value falls below your Prop 13 assessed value, you can request a decline-in-value (Prop 8) reassessment supported by comparable sales near the January 1 lien date. It lasts until values recover.

Related

Jumbo loans & PITI Fire insurance guide October rate math More guides

Sources: California State Board of Equalization (State Assessment Manual; Property Tax Legislative Bulletin 2023; Proposition 19 guidance; homeowner's exemption info); PropertyShark (2026-27 Oakland tax rate breakdown); Ticor Title (supplemental tax explainer); Alameda County Assessor; Los Angeles County Assessor (2024); Realtor.com (Oct 15, 2026, Freddie Mac survey).