Supplemental Property Tax
Supplemental real property tax law is part of a drive to help California’s education system. This law affects homeowners wishing to buy or build a new home. Supplemental property tax is a one-time tax which dates from the time the homeowner takes ownership of a property (or completes construction on a new property) until the end of the tax year on June 30.
How Is The Amount of the Bill Determined?
The tax bill is determined by a specific formula. This tax is based on the difference in assessed value of a home when purchased by the prior owner and the newly assessed value for the new owner. For a newly built home, the supplemental property tax is based on the difference in value of the land before construction and the new property value after construction is complete. The total supplemental assessment will be prorated based on the number of months remaining until the end of the tax year, June 30.
Will the Supplemental Taxes Be Prorated in Escrow?
No: supplemental tax is a one-time tax and is in effect from the date when the buyer takes ownership of property, and it will be billed by the County Controller/Tax Collector.
When and How Will the Homeowner Be Billed?
When the property is appraised during the lending process, the homeowner will be advised of their supplemental assessment amount. The owner will be given an opportunity to discuss the valuation, apply for a Homeowner’s Exemption and file an Assessment Appeal if needed. The County will then calculate the supplemental tax and a bill will be mailed to the homeowner. This can take between 3 weeks to 6 months after close of escrow. A lien is put on the property for the supplemental taxes, so the homeowner must be careful to pay the taxes by the date noted on the supplemental tax bill.
Can the Supplemental Tax Bill Be Paid in Installments?
All supplemental taxes on the secured roll are payable in two equal installments. The taxes are due on the date the bill is mailed and are delinquent on specified dates, as follows:
1) If the bill is mailed from July through October, the first installment will become delinquent on December 10 of the same year. The second installment will become delinquent on April 10 of the next year.
2) If the bill is mailed from November through June, the first installment will become delinquent on the last day of the month following the month in which the bill is mailed. The second installment will become delinquent on the last day of the fourth calendar month following the date the first installment is delinquent.
Will the Supplemental Tax Be Prorated?
The supplemental tax goes into effect on the first day of the month following the month in which the change of ownership or completion of construction occurred. The table of proration factors shown in the chart below is used to compute the supplemental assessment on the current tax roll.
Effective Date Proration Factors
August 1 0.92
September 1 0.83
November 1 0.67
December 1 0.58
January 1 0.50
February 1 0.42
March 1 0.33
April 1 0.25
May 1 0.17
June 1 0.08
July 1 0
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