&gt; they wouldn&#x27;t be allowed to sell for more than a small percentage more than the tax assessed value<p>This just has a bad smell to it - not only you&#x27;re inviting corruption and avoidance into the deal (the buyer is asked to bring the check for the assessed value and a suitcase of cash to the deal), the actual revenue collected by the state would fall, and the federal government is likely to contest this setup as it stands to lose out on capital gains.<p>&gt; Right now, Prop 13 beneficees have an assessed value of, say $300,000, on a $1,000,000 house.<p>Assuming a very healthy and robust real estate market that grows gangbusters 15% every single year and never falls, it would take 9 years for a $300,000 property to grow into $917,706. It would go over the $1,000,000 sticker during year 10.<p>Of course, this is assuming ever-lasting 15% valuation increase and no price correction whatsoever, but even in this ideal market the owner has lived there for 9+ years and does not fall qualify for your definition of &quot;keeping people in their home&quot;?<p>Even when he sells, the cash he has on hand is enough to (surprise!) buy a comparable house, so this crazy speculation scheme is only doable once in life.