Assessed Value: The assessed value of property in California is the lower of (1) the current market value, or (2) the base year market value (usually the purchase price), with assessed value increases limited to a maximum of 2 percent per year regardless of the property's actual increase in value.
A new base year assessment can be imposed only when another transfer of ownership occurs (although no reassessment occurs if transfer is between spouses, parent to child, or into a living trust).
If there is new construction on the property (for instance, a room addition), the value of the new construction can be added to the current assessment, but it is subject to the 2 percent annual cap thereafter.
When Californians mention Prop 13, they are referring to the 1978 voter initiative (proposition) which instituted this assessment valuation cap.
Homeowner's Exemption: For a property you own and occupy as your primary residence, the homeowner's exemption allows a subtraction of $7000 off the assessed value.
Estimating your real estate taxes: To estimate real estate taxes on your primary residence, subtract $7000 from the purchase price of the property, divide the result by 100, and then multiply by $1.25.
For example, if you purchase a $300,000 primary residence, your first annual real estate taxes will be approximately $3663. Since Prop 13 will limit your second year assessment to a maximum of $306,000, your second annual real estate taxes will be, at the most, approximately $3738.
For more detailed information, here's the link to the LA County Assessor's Web Site.
Mello Roos Taxes: If a property is located in a Mello Roos Community Facilities District, there is a special additional tax. A Mello Roos tax is usually only found in newer subdivisions where the political jurisdiction incurred costs of installing the infrastructure for that development (streets, utilities, etc.). The Mello Roos tax is charged to the property owner to help recoup these expenses.
The Mello Roos Tax is not based on the cost or value of the property (in other words, it is not an ad valorem tax). It is, however, a line item on, and paid in conjunction with, the county real estate tax bill.
If a property is located within a Mello Roos District, the seller must disclose this to a potential buyer.