Taxes and death are two things we cannot avoid. We try to avoid them, but, always, in the end,……they catch up to us
Here we provide information on how taxes are determined, when to pay, Supplemental Tax bills, who pays what when in escrow, etc. We hope to provide you a better understanding of property taxes before, during and after the home buying and selling process.
How Property Taxes are Determined
Property taxes are governed by California State Law and collecte by the county. The County Assessor must first assess the value of your property to determine the amount of property tax.
Generally the assessed value is the cash or market value at the time of purchase. This value increases not more than 2% per year until the property is sold or new construction is completed.
The Auditor-Controller applies the appropriate tax rates, which include the general tax levy, locally voted special taxes, and any city or district direct assessments.
The Tax Collector prepares property tax bills based on the auditor-controller’s calculations, distributes the bills, then collects the taxes.
Property Tax Due Dates for California
January 1st – Assessment date – Taxes become a lien at 12:01am. Not yet due and payable for the Fiscal Year starting July 1st. Thereafter title evidence must show taxes as a lien for the coming Fiscal Tax Year.
April 15th – Due date for exemptions – Last day to file for 100% veterans or homeowners exemption. To be eligible for applicable exemptions, you must own and occupy the property on January 1st.
July 1st – Current Fiscal Tax Year Begins
October – Tax Collector mails out original secured property tax bills
November 1st – First Installment Due (1st installment pays July 1st to December 31st
December 1st – Last day to file for 80% veterans or homeowner exemption
December 10th – First installment become delinquent at 5pm – A 10% penalty is added
January 1st – Tax collector mails delinquent notices for any unpaid 1st installment
February 1st – Second Installment Due (2nd installment pays January 1st to June 30th)
April 10th – Second Installment becomes delinquent at 5pm. A 10% penalty plus $10.00 administrative charge is added.
May – Tax Collector mails delinquent notices for any unpaid, second installment.
June 30th – Property Tax may become Defaulted – If you fail to pay either or both installment by 5pm, property tax become defaulted and additional costs and penalties accrue
July 1st – Delinquent accounts are transferred to delinquent tax roll (tax-defaulted property) and additional penalties added at 1-1/2% per month on any unpaid tax amounts, plus $15.000 redemption fee.
If the past due property taxes are not brought current, the property may be sold at public auction after 5 years of delinquency.
Can You Disagree with the Assessed Value?
You may apply to the Assessor to see if that office will change valuation
Additionally, Appeals boards have been established for the purpose of resolving valuation problems. Appeals on regular assessments may be filed between July 2nd and September 15th. Appeals on corrected assessments, escaped assessments (assessments that did not take place when they should have), or supplemental assessments must be filed no later than 60 days from the mailing date of the corrected, escaped or supplemental tax bill.
If you file a appeal, you still need to pay the current taxes in full by the appropriate deadlines or you may incur penalties. If your appeal is granted, a refund will be issued to you.
When You Purchase a Property
Here is breakdown of how the property taxes are prorated between the buyer and seller in escrow. All prorations are based on the Close of Escrow Date:
Supplemental Real Property Taxes
The supplemental real property tax law was signed by the governor of California in July of 1983 and is part of an ambitious drive to aid California Schools.
Several events may cause a reassessment of real property value by the County Tax Collector. the reassessment may result in a new or additional taxes.
The most common cause is the transfer of ownership and issuing new building permits. Your lender’s impound account does not provide for additional supplemental taxes as they are prorated in escrow. Unless there is an unpaid supplemental bill outstanding at the time escrow closes.
Once you have closed escrow on your property, the Assessor may appraise the property. You can be billed in as few as three weeks or ti could take more than six months. Timing will depend upon the individual county workload for the Controller and Tax Collector.
At that time you will have the opportunity to discuss your valuation, apply for a Homeowner’s Exemption, and be informed of your right to file an Assessment Appeal which disputes the new tax valuation.