The price resets for the new owner. Under Prop 13, the assessed value is X when you buy it and can only be increased by up to ~2% per year even if your home we

The price resets for the new owner. Under Prop 13, the assessed value is X when you buy it and can only be increased by up to ~2% per year even if your home went up in value by much more. This chains together over long periods of time, so that if you bought a place 20 years ago you are now paying property tax on at most X * 1.02^20. If the new owner paid you 5X for the home, they now pay property tax against that value moving forward.