Parcel Taxes

Parcel Tax in California

Parcel taxes differ from traditional ad valorem property taxes (taxes levied as a percentage of value), because local government imposes it on a per-parcel basis.  Local governments that may impose parcel taxes include cities, counties and special districts, such as schools, hospitals and public safety districts.

State law allows local governments to impose parcel taxes, as long as the tax is not based on the value of a property. Two-thirds of the electorate must approve any parcel tax.

While there is no consistent definition, the Board of Equalization defines a parcel as “an area of land in one ownership and one general use.” For tax purposes, a “parcel” is a property, or part of a property, that sits within the invisible boundaries of a local government (known as a tax rate area). These invisible boundaries may divide a taxpayer’s property, thus creating multiple parcels out of a single property.

With the impact of Prop 13 in California since its inception in 1978, parcel taxes are a way to assess property owners they would otherwise not pay for since Prop 13 caps their tax contributions. In other words, parcel taxes are one way around Prop 13.