CALIFORNIA REAL ESTATE
TAX LAW PRACTICE EXAM
Question 1: In California, the property tax year (�scal year) runs on which schedule?
Choices:
1) January 1 to December 31 2) July 1 to June 30 3) April 15 to April 14 4) September 1 to August 31
Correct Answer: July 1 to June 30
Explanation: The California property tax �scal year begins on July 1 and ends on June 30 of the following year.Page 1
Question 2: Under California's Proposition 13, what is the maximum basic ad valorem tax rate that can be levied on real property?
Choices:
1) 1% 2) 2%
3) 1.25%
4) 0.5%
Correct Answer: 1%
Explanation: Proposition 13 limits the maximum basic property tax rate to 1% of the property's assessed value, plus any local voter-approved bonds.Question 3: According to Proposition 13, how much can a property's assessed value be increased annually for in�ation if there is no transfer of ownership?
Choices:
1) A maximum of 1% 2) A maximum of 2% 3) A maximum of 5% 4) It cannot be increased at all
Correct Answer: A maximum of 2%
Explanation: Proposition 13 restricts annual assessment increases for in�ation to a maximum of 2% per year, unless a change of ownership or new construction occurs.Page 2
Question 4: What does the 'No Darn Fooling Around' acronym stand for regarding
California property tax installment due dates?
Choices:
1) November 1, December 10, February 1, April 10 2) November 1, December 10, March 1, April 10 3) October 1, November 10, February 1, March 10 4) November 15, December 15, February 15, April 15
Correct Answer: November 1, December 10, February 1, April 10
Explanation: NDFA helps remember: First installment is due November 1, delinquent December
- Second installment is due February 1, delinquent April 10.
Question 5: When a real estate property is sold in California, a documentary
transfer tax is typically charged. What is the standard county base rate?
Choices:
1) $0.55 per $500 of value 2) $1.10 per $1,000 of value 3) Both A and B are correct representation of the same rate 4) $0.10 per $100 of value
Correct Answer: Both A and B are correct representation of the same rate
Explanation: The standard California documentary transfer tax rate is $0.55 per $500 or $1.10 per $1,000 of cash value transferred, excluding any assumed loans.Page 3