When it comes to owning a home in Beverly Hills—whether it's an opulent estate north of Sunset or a sleek contemporary in Trousdale—the actual cost of ownership is well beyond the purchase price. For high-net-worth individuals entering the market, it's essential to understand how California's property tax system works and what makes Beverly Hills, in particular, unique. From Propositions 13 and 19 to local transfer taxes and supplemental bills, this guide demystifies the key components of the property tax system that governs luxury homes in Beverly Hills.
How Property Taxes Are Calculated
Property taxes in Beverly Hills are determined under the California state framework, administered at the county level by the Los Angeles County Assessor's Office, and collected by the County Treasurer and Tax Collector.
Base Tax Rate: 1%
The foundation of the system is Proposition 13, which limits the base tax rate to 1% of a property's assessed value. This value is based on the purchase price at the time of acquisition and can only increase by up to 2% annually, unless the property is sold or undergoes significant improvements.
Special Assessments and Levies
On top of the 1% base rate, additional local taxes and levies to fund schools, infrastructure, public safety, parks, and other community needs may also apply to your overall property tax. These often push the effective property tax rate to around 1.18% in Beverly Hills, according to recent figures.
For context, the annual property tax bill for a Beverly Hills home at the median home price of $3.5 million is $41,300.
Key Propositions That Affect Beverly Hills Homeowners
Several California propositions can impact your annual property tax bill. Below is a brief overview of the four primary measures that homeowners should be aware of when reviewing their property taxes.
Proposition 13 and Proposition 8
As mentioned, Proposition 13 limits annual assessment increases and establishes a fixed base rate. Approved in 1978, the result is favorable long-term predictability—especially beneficial for those holding high-value real estate for extended periods.
In the same year, the addition of the Proposition 8 amendment allowed for temporary reductions in assessed value when market values fall below the Prop 13 value. The reduction is reviewed annually, with adjustment increases as the market recovers.
Proposition 19
Eligible homeowners over 55, disabled persons, or victims of natural disasters can transfer their property tax base to a new primary residence anywhere in California—potentially multiple times. Proposition 19 also limits the ability of heirs to inherit and maintain low property taxes. Essentially, it forces the reassessment of property taxes on inherited property unless the beneficiaries occupy the home as their primary residence.
Proposition 218
Better known as the "Right to Vote on Taxes Act," this measure requires voter approval for new or increased local government taxes, giving property owners more control over future tax burdens.
Beverly Hills vs. Measure ULA
Unlike properties in the City of Los Angeles, Beverly Hills is not subject to Measure ULA, also known as the "mansion tax," which imposes a steep transfer tax on real estate sales over $5 million in Los Angeles. The lack of the ULA makes Beverly Hills particularly attractive for high-value transactions and luxury developments.
The only transfer tax imposed on the sale of a Beverly Hills home, regardless of its sale price, is the 0.11% Los Angeles County Transfer Tax, its own Real Property Transfer Tax. This distinction continues to influence buyer behavior in the ultra-luxury market.
Homeowners' Exemption
Primary residences may qualify for a $7,000 homeowners' exemption from assessed value, equating to a $70 annual tax savings. Though modest, it's a routine filing every homeowner should consider.
Appealing and Paying Your Assessed Value
If you believe your home's assessed value is inaccurate, you have the right to appeal through the Los Angeles County Assessment Appeals Board. The process involves:
- Filing an application with evidence supporting your claim.
- Participating in a hearing where the board may decrease, maintain, or even increase your assessment based on the evidence.
You should file appeals during the designated assessment period, typically between July 2 and November 30 each year.
Due Dates and Supplemental Bills
Annual tax bills are mailed each October, with two main installments:
- First installment due November 1 (delinquent after December 10)
- Second installment due February 1 (delinquent after April 10)
Late payments are subject to penalties and interest, and California does not offer extensions.
Supplemental Property Tax Bills
When a property changes ownership or undergoes renovation, supplemental assessments may occur. These trigger additional tax bills that reflect the new value and apply only to the portion of the tax year following the change. These bills:
- Are separate from the regular tax bill
- Are not typically covered by mortgage impound accounts
- Have individual due dates noted
Where Your Tax Dollars Go
Property taxes are a vital revenue stream across Los Angeles County and its municipalities. They help fund:
- Public schools
- Emergency services and law enforcement
- Infrastructure maintenance and new construction
- County and municipal employee salaries
- Libraries, parks, and other civic amenities
In Beverly Hills specifically, property taxes contribute to a high standard of local services—within Los Angeles County, the city ranks fourth in taxable property value, despite being in the bottom half of the county's 88 incorporated areas in terms of population, including some of the best-maintained public infrastructure and fastest emergency response times in the region.
Explore more of Beverly Hills with a Trusted Real Estate Expert
The Beverly Hills property tax system is structured to balance stability with flexibility. With protections under Prop 13 and relocation incentives under Prop 19, long-term investors and primary residents alike benefit from a relatively predictable tax structure.
However, supplemental assessments, transfer taxes, and voter-approved levies mean that your effective tax rate may exceed the base 1%—so budgeting around 1.15% to 1.2% of your home's purchase price is wise.
For luxury buyers comparing markets across Los Angeles County, it's worth noting that Beverly Hills remains exempt from the Measure ULA mansion tax, giving it a strategic edge for high-end sales and preserving wealth during transfers.
Whether you're seeking a Beverly Hills home or investment property, or considering listing a current residence for sale, contact The Umansky Team today to start your Beverly Hills real estate journey. Allow our team's extensive experience and expertise to help you navigate one of LA's most celebrated addresses.
