Most homeowners know that Proposition 13 limits annual increases in the base property tax to no more than 2%. However, sometimes those who buy at the height of a market cycle – as we saw in 2006 – will later see a reduction in the property value. This entitles them to a temporary tax reduction under Proposition 8. Now that property values are increasing, many homeowners who received the temporary reduction are seeing their taxes increase by more than 2%. This video from CBS 13 in Sacramento explains in more detail why this happens.