Property OwnershipIntermediateCalifornia Exam

Under California's Proposition 13, when is real property generally reassessed to market value?

AEvery 5 years regardless of ownership changes
BUpon a change in ownership or completion of new constructionCorrect
COnly when the owner requests reassessment
DAnnually based on current market conditions

Why Upon a change in ownership or completion of new construction Is Correct

Answer B: Upon a change in ownership or completion of new construction

Proposition 13 limits property tax increases to 2% per year after the initial assessment. However, property is reassessed to current market value when there is a change in ownership or when new construction is completed, triggering a new base year value.

Exam Tip: Property Ownership

Property ownership questions test the bundle of rights and different forms of ownership. Know the differences between joint tenancy, tenancy in common, and community property, including the right of survivorship.

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