What is a Levy?

The property tax levy is the revenue a community can raise through real and personal property taxes.

What is a Levy Ceiling? What is a Levy Limit?

What is a Levy Ceiling?

What is a Levy Limit?

Proposition 2 1/2 places constraints on the amount of the levy raised by a city or town and on how much the levy can

be increased from year to year.

A levy limit is a restriction on the amount of property taxes a community can levy. Proposition 2 1/2 established two

types of levy limits:

First, a community cannot levy more than 2.5 percent of the total full and fair cash value of all taxable real and personal property in the community. In this primer we will refer to the full and fair cash value limit as the levy ceiling.

Second, a community’s levy is also constrained in that it can only increase by a certain amount from year to year.

We will refer to the maximum amount a community can levy in a given year as the levy limit. The levy limit will

always be below, or at most, equal to the levy ceiling. The levy limit may not exceed the levy ceiling.

How is a Levy Limit Calculated?

A levy limit for each community is calculated annually by the Department of Revenue. It is important to note that a

community’s levy limit is based on the previous year’s levy limit and not on the previous year’s actual levy.