Prop 13 pegged jumps in property taxes to time of sale. Therefore, people who have stayed put for decades keep the averages down.
I know CA people who bought homes for $30K back in the 70s and their tax assessments are still based on that. But those $30K homes now sell for $2-3 million. The new buyer gets socked going forward.
Another tax-relief loophole that’s gone down the memory hole is the assumable loan. I know people in CA who bought cheap rental properties, then later on deeded over the assumable mortgages — and super-low property taxes— to the next buyer, with the down payment in cash under the table. Can’t do dat no mo.
Conversely, I now live in a state where real estate is more affordable, but our rural economy is depressed & homes typically sit unsold for over a year. Property taxes are rather whimsically assessed, often at a higher *rate* and based on what the assessor sees similar homes selling for in larger cities where jobs & wages are more abundant.
Thus, if you buy a 4 BR brick, bank-owned foreclosure for $30K, you might find yourself paying property taxes equal or higher than an owner of a similar home assessed at $200K in a nearby major city.
Property taxes are probably the most unfair of all taxes. I lived in a neighborhood near a university where I taught. My salary was such that the house I bought cost more than I wanted to pay, but I figured to stay there a long time. It was tight to pay the property taxes. Across the street was a multi-multi-millionaire whose property taxes were about the same as mine.
There are two theories of Taxation. First, is the Ability to Pay, which is the basis for a progressive income tax rate. His ability to pay the property taxes was a bazillion times my ability, so it fails that test.
The second is Benefits Received (e.g., the gasoline tax). In Indianapolis at the time, almost two-thirds of the property taxes were used for public education. The guy had no kids, so it failed that test from his point of view. It fails mine now, since I have no kids in school.
Almost any tax on wealth is going to come back and bite you in the butt.