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I think it is similar with property taxes. At least where I am they are tied to property value, which is assessed based on the recent sale price of comparable properties. If someone is willing to paying huge sums for houses in your neighbourhood you always end up paying more for yours.

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Does CA not have limits on property tax increases each year?

I live in FL and the homestead laws prevent the property taxes from raising more that a few percent each year as long it's the primary residence. So, my neighborhood can skyrocket in value and I won't find myself unable to pay my property taxes. The valuation resets on the sale of the property though.

I honestly don't know, but if Proposition 13 is still in effect [1] then it would appear you are right - property taxes can only increase by 2% a year.

[1] https://en.wikipedia.org/wiki/California_Proposition_13_%281...

It is still in effect, unfortunately.

Why would that be unfortunate? I imagine it protects many people from losing their home due to out of control home valuations.

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