California Buy vs Rent Calculator
See whether buying or renting leaves you financially ahead in California over the years you plan to stay. The calculator builds in Prop 13's 2% cap on annual property tax increases, the moderate rent growth allowed under AB 1482, and the higher SALT deduction cap, then compares your net financial position either way.
Calculator Inputs
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Time Horizon
Results: Buy vs. Rent in California
Renting comes out ahead by $12,696.35 over 10 years.
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Buying a Home
Renting
See the full breakdown
Buying a Home
Savings shrink over time as the interest share of your payment falls.
Renting
30-Year Financial Comparison
Projected net financial position over 30 years for both scenarios, based on your inputs.
Why California is Different
The protections that shape California's housing market
Proposition 13: The Homeowner's Advantage
California's Proposition 13, passed in 1978, caps annual property tax increases at 2% per year, no matter how much your home appreciates. Rents in your neighborhood might double over a decade while your property tax bill barely moves. The gap widens the longer you own, especially in high-appreciation areas like the Bay Area and Los Angeles.
Renter Protections: AB 1482 and Local Controls
California also protects renters through the Tenant Protection Act (AB 1482), which applies statewide to most rental properties built more than 15 years ago. The law caps annual rent increases at 5% plus local inflation, with a maximum of 10% per year, which keeps rent growth slower than in states with no rent control.
San Francisco Example: Enhanced Rent Control
San Francisco layers its own rent control ordinance on top of AB 1482. For buildings constructed before June 13, 1979, annual rent increases are limited to around 60% of the Bay Area Consumer Price Index (CPI), which has meant increases of 1-2% in most years. The city also requires "just cause" for evictions. If you rent long-term in an older San Francisco building, your housing costs stay stable enough to shift the math against buying.
How Our Calculator Accounts for California's Unique Market
The calculator builds Prop 13's property tax cap into the buying side, and the rent increase input lets you model rent growth under AB 1482. If you rent a pre-1979 building in San Francisco, set the rent increase to 1-2% to match the city's rent control.
The 2025 SALT Deduction Cap Increase
Starting with the 2025 tax year, the State and Local Tax (SALT) deduction cap increased from $10,000 to $40,000 for most taxpayers ($40,400 in 2026, rising slightly each year through 2029, then reverting to $10,000). The higher cap phases back down to $10,000 for incomes above roughly $500,000. SALT combines state income taxes and property taxes under one limit, so the increase matters most in California, where high state income tax alone often used up the old cap.
Impact on California Homeowners
Under the old $10,000 cap, state income taxes alone often used the whole deduction, leaving no room for property taxes. The $40,000 limit leaves room for both, which raises the tax savings from owning. The gains are largest for middle and upper-middle income earners in high-cost areas like the Bay Area and Los Angeles: enough state tax to have hit the old cap, but below the roughly $500,000 income where the phase-down starts.
What's changed on this page
- August 6, 2026 Rebuilt the tax model on 2026 federal brackets and standard deduction, the $40,400 SALT cap and its phase-down above $505,000, and the $750,000 mortgage interest limit. Fixed the yearly schedule to stop charging a mortgage past payoff, to drop PMI at 80% of the original value, and to invest surplus cash for the buyer as well as the renter. The security deposit now defaults to one month's rent, per AB 12.
- May 23, 2025 Published.
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