The short answer: your current tax bill is safe, because Proposition 13 still caps most California property taxes at 1 percent of assessed value and limits annual assessment growth to 2 percent, and nothing on the November 2026 ballot would repeal it. But people are searching this question for good reason. A measure is on that ballot that could stop cities from layering on new transfer taxes, and the rules for passing a home to your children changed back in 2021 under Prop 19. Here is what homeowners in Novato and Petaluma need to understand, in plain English.
What is on the November 2026 ballot?
The Local Taxpayer Protection Act, qualified for the November 3, 2026 ballot, would require a two-thirds public vote before cities and counties approve new special local taxes, and it would prohibit cities from imposing real estate transfer taxes above the state's existing cap. The measure comes out of a wider debate that includes Los Angeles' so-called mansion tax on high-value sales, which has reshaped how some big cities fund themselves. For the North Bay, the practical question is whether a future city could quietly add its own closing-cost tax; the measure would set a clear statewide limit that protects sellers and buyers at the table.
How your property tax bill is actually calculated
Two numbers matter: the assessed value, usually set when you buy, and the tax rate, capped by Prop 13 at 1 percent of assessed value plus voter-approved bonds. Assessments can rise no more than 2 percent a year, which is why a home bought decades ago is often taxed on a fraction of its market value. A change of ownership still triggers reassessment to current market value, with the two big exceptions below.
The transfer tax nobody mentions until closing
Annual property tax is one thing; the documentary transfer tax at closing is another. State law sets the base at $1.10 per $1,000 of sale price, about 0.11 percent, and cities may add their own on top. Petaluma does exactly that: it adds $2.00 per $1,000 on top of the county rate, so a Petaluma sale pays about $3.10 per $1,000, or $3,100 on a $1 million home. In Novato, no city add-on is currently in effect, and among Sonoma County cities only Petaluma and Santa Rosa add their own on top of the county base. It is one reason closing-cost estimates vary from town to town, and why a statewide cap on new transfer taxes matters here.
What Prop 19 changed for parents and heirs
Prop 19, which took effect in 2021, rewrote two long-standing rules. If you are 55 or older, you can now transfer your assessed value to a replacement home anywhere in California, up to three times, as long as you buy within two years of selling. That is a major upgrade for empty nesters moving between Novato, Petaluma, and beyond without a tax reset. The inheritance rules tightened: the old unlimited parent-child exclusion is gone. A child now keeps the parent's assessed value only if the home was the parent's principal residence and the child makes it their own principal residence within one year, and even then the exclusion is capped at the parent's base-year value plus about $1 million, adjusted by the state for inflation. Inherited rentals, second homes, and other non-primary residences are reassessed to market value at transfer.
None of this is tax advice, and every transaction has its own facts, but these are the ground rules that quietly decide thousands of dollars a year. If you are buying, selling, downsizing, or sorting out an inherited home in the North Bay, I will walk through your numbers honestly, the same way I handle inspections and offers. Love where you live, and keep your tax questions with someone who gives you the complete picture.
Helpful next steps
“The rules that protect your tax bill only help if you know they exist. That has never been truer than it is after Prop 19.”
Peter Schardt
Written by
Peter Schardt
21 years in real estate, 100+ homes sold, and a lifetime in the North Bay. Sales Associate · 01702383 · California.
