By The Jen Caskey Group
California property taxes work differently than most people expect — especially buyers coming from other states. The rules here are shaped almost entirely by a 1978 constitutional amendment called Proposition 13, and understanding how it works changes the way you think about buying and owning here.
Key Takeaways
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Under Proposition 13, your property tax is based on your purchase price, not the current market value
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Your assessed value can only increase by a maximum of 2 percent per year until the property is sold or substantially improved
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In Manhattan Beach, the effective tax rate runs approximately 1.12 percent of assessed value, plus direct assessments
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New buyers should expect a supplemental tax bill in their first year — a common surprise that catches people off guard
The Foundation: Proposition 13
Proposition 13 passed in June 1978 and fundamentally changed how California taxes real property. Before it, counties reassessed homes to market value regularly, and during housing booms property tax bills could double or triple in a single year. Seniors on fixed incomes were losing homes they had owned for decades.
Proposition 13 solved that by tying your assessed value to your purchase price. When you buy, the county assessor sets your assessed value at what you paid. From there, it can only increase by a maximum of 2 percent per year, regardless of what the market does. Properties are only reassessed to current market value upon a change of ownership or completion of new construction.
Proposition 13 solved that by tying your assessed value to your purchase price. When you buy, the county assessor sets your assessed value at what you paid. From there, it can only increase by a maximum of 2 percent per year, regardless of what the market does. Properties are only reassessed to current market value upon a change of ownership or completion of new construction.
What Proposition 13 Establishes
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The base property tax rate is capped at 1 percent of assessed value
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Annual increases to assessed value are limited to a maximum of 2 percent
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Properties are only reassessed at current market value upon change of ownership or new construction
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Local voter-approved bonds and assessments are added on top of the 1 percent base rate
Two neighbors in identical homes can pay very different property tax bills based solely on when they bought. Someone who purchased in 2005 pays significantly less than someone who bought the same home in 2025 at today's prices.
What You Actually Pay in Manhattan Beach
The base property tax rate under Proposition 13 is 1 percent of assessed value. In Manhattan Beach, the total effective rate for fiscal year 2024–25 is approximately 1.12 percent, according to South Bay property tax records. That figure reflects the base rate plus voter-approved bonds and local assessments layered on top.
On top of the percentage-based rate, Manhattan Beach homeowners also pay direct assessments — flat fees per parcel that fund specific services. The largest of these goes to the Manhattan Beach Unified School District, which accounts for approximately $796 per year per million dollars in assessed value. Voters also approved a school parcel tax renewal (Measure MB) in March 2024 and a $200 million school bond measure (Measure RLS) in November 2024.
On top of the percentage-based rate, Manhattan Beach homeowners also pay direct assessments — flat fees per parcel that fund specific services. The largest of these goes to the Manhattan Beach Unified School District, which accounts for approximately $796 per year per million dollars in assessed value. Voters also approved a school parcel tax renewal (Measure MB) in March 2024 and a $200 million school bond measure (Measure RLS) in November 2024.
What Goes Into a Manhattan Beach Property Tax Bill
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Base rate: 1 percent of assessed value (Proposition 13)
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Voted bonds and local assessments: approximately 0.12 percent additional
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MBUSD direct assessment: approximately $796 per year per million in assessed value
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Measure MB parcel tax: a flat annual amount per parcel approved by voters in 2024
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Total effective rate: approximately 1.12 percent of assessed value, plus direct assessments
For a home purchased at the current Manhattan Beach median of $3.35 million, that comes to roughly $37,500 to $40,000 in annual property taxes in the first year of ownership, depending on which tax rate area the property falls in.
The Supplemental Tax Bill
One of the most common surprises for new California buyers is the supplemental property tax bill. After you close, the county initially continues billing at the prior owner's assessed value. Once the assessor processes the change of ownership, they calculate the difference and bill you for it — prorated for the remainder of the tax year.
This supplemental bill arrives separately from your regular annual tax bill, sometimes months after closing. It is not included in most escrow accounts and is the new owner's responsibility entirely. If you close between January 1 and May 31, you may receive two supplemental bills covering two different fiscal years.
This supplemental bill arrives separately from your regular annual tax bill, sometimes months after closing. It is not included in most escrow accounts and is the new owner's responsibility entirely. If you close between January 1 and May 31, you may receive two supplemental bills covering two different fiscal years.
What New Buyers Should Do
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Budget for a supplemental tax bill in the first year — ask your agent for an estimate before you close
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Confirm whether your lender's escrow account will cover the supplemental bill, as most do not
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Apply for the Homeowner's Exemption after closing — it reduces your assessed value by $7,000 and saves roughly $70 to $100 per year
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Understand your exact tax rate area, since rates vary slightly by location within Manhattan Beach
What Proposition 13 Means for Long-Term Owners
For long-term Manhattan Beach homeowners, Proposition 13 is a meaningful financial protection.
Why Long-Term Owners Rarely Sell
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A homeowner who bought in 2005 at $1.2 million pays taxes on an assessed value of roughly $1.83 million today — not on the $4 million the home may be worth now
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Selling resets the assessed value to the current purchase price, which at today's Manhattan Beach prices means a substantially higher annual tax bill for the new buyer
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The longer someone has owned, the wider that gap becomes — and the stronger the financial incentive to stay
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This dynamic is a key reason why Manhattan Beach inventory stays historically tight
Frequently Asked Questions
Will my property taxes go up every year?
Yes, but only by a maximum of 2 percent annually under Proposition 13 — unless you sell or complete major new construction. Your assessed value is reset to your purchase price at the time of sale, and from there it grows at no more than 2 percent per year.
What triggers a reassessment in California?
A change of ownership or the completion of new construction. Routine maintenance and cosmetic work do not trigger reassessment. Adding square footage, building a pool, or completing a major addition will increase your assessed value by the value of the improvement. Transfers between spouses generally do not trigger reassessment.
How does Proposition 13 affect what I should budget when buying in Manhattan Beach?
At the current median sale price of $3.35 million, you should budget roughly $37,500 to $40,000 annually in property taxes in your first year, depending on your specific location. That figure will increase by no more than 2 percent per year going forward, which is one of the more predictable carrying costs in what is otherwise a high-cost market.
Questions About Property Taxes in Manhattan Beach?
Property taxes are one of the carrying costs we walk through with every buyer we work with, and the details matter more than most people realize before they are in contract. If you are thinking about buying in Manhattan Beach and want to understand exactly what you will be paying, reach out to us, The Jen Caskey Group, and we will give you a straight answer.
