California Set 2027 Interest Rate for Historical Homes
Owners of designated historic properties in California should note the new 6.75 percent interest component for 2027.
Updated on Oct. 5, 2026 in Commercial
The California State Board of Equalization has established the annual interest component for historical properties at 6.75 percent for the 2027 assessment year. This figure is used by county assessors to value eligible historic homes for tax purposes.
Why it matters
This interest rate is a critical input in the capitalization of income method used to value historical properties, directly influencing how these unique homes are taxed. The rate is determined annually to reflect current market conditions as required by state law.
The 2027 interest component was officially set at 6.75 percent, which is rounded from the Federal Home Loan Mortgage Corporation effective mortgage rate of 6.71 percent as of September 1, 2026.
The players
California State Board of Equalization
This state agency oversees property tax assessment standards and serves as a vital authority for California homeowners regarding tax-related valuation policies.
Federal Home Loan Mortgage Corporation
Known as Freddie Mac, this entity provides the benchmark mortgage interest rates that influence how the state calculates annual adjustments for property tax valuations.
The details
California county assessors apply a capitalization of income method to determine the value of properties designated as historical for tax assessment. The interest component is a necessary calculation variable required by Revenue and Taxation Code sections 439 through 439.4. This rate is derived annually by taking the Federal Home Loan Mortgage Corporation effective average interest rate and rounding the figure.
Timeline
September 1, 2026: Mortgage interest rate measurement date.
2027: Assessment year for the new interest component.
The Home Front
This annual rate adjustment is mandated by Revenue and Taxation Code sections 439 through 439.4 to ensure property valuations remain tethered to prevailing market mortgage trends. It represents the formal bridge between national mortgage interest rates and local state tax assessments.
Homeowners with historically designated properties should contact their local county assessor to understand how this 6.75 percent component will specifically affect their tax assessment for the coming year. Ensure your property's historical designation remains current to qualify for valuation methods tied to this interest rate.
The takeaway
The California State Board of Equalization has set the 2027 historical property interest component at 6.75 percent. Owners of historic homes should consult their county tax assessor records to verify how this rate applies to their property's valuation for the 2027 assessment cycle.
Further reading
Learn more about the latest developments in Commercial real estate regulations.
