It's just market value. > *SECTION 1. (a) The maximum amount of any ad valorem tax on real property shall not exceed One percent (1%) of the full cash value o

It's just market value. > *SECTION 1. (a) The maximum amount of any ad valorem tax on real property shall not exceed One percent (1%) of the full cash value of such property. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.* (https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=CONS&division=&title=&part=&chapter=&article=XIII%20A https://leginfo.legislature.ca.gov/faces/codes_displayText.x...) At sales time basically the sales price establishes the assessed value for taxes. Again, this isn't a precise reading, but the general idea.