How Property Taxes Are Determined
Property taxes are governed by California State law and collected by the county. The County Assessor must first access 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 completed. The Auditor-Controller applies the appropriate tax rates, which include the general tax levy, locally voted special taxes and city or district direct assessments. The Tax Collector prepares property tax bills based on the Auditor-Controller’s calculations, distributes the bills and then collects the taxes.
Can You Disagree With the Amount?
You may apply to the Assessor to see if that office will change the valuation. Additional, appeals boards have been established for the purpose of resolving valuation problems. Appeals on regular assessments may be filed between July 2 and September 15. 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.
File an Appeal but Remember to Pay the Tax
If you choose to appeal, still pay your tax installments in full by the appropriate deadlines or you may incur penalties. If your appeal is granted, a refund will be issues to you.
If you are over the age of 55 you may be eligible for property tax relief using California Proposition 60 & 90.
Did you Recently Purchase Property?
Although escrow prorates taxes and gives appropriate credit between buyer and seller, the actual taxes may not have been paid and you may be responsible for un-paid taxes. Read your escrow papers and/or title report to determine if any portion of the annual taxes were paid by the previous owner before the close of escrow.
If any taxes remain unpaid, call the Tax Collector and request a bill. When you call, give the Assessor’s Identification Number (consisting of map book, page, and parcel number) from a previous tax bill or the property address. State law stipulates that failure to receive a bill does not permit the Tax Collector to excuse penalties on late payments.
Supplemental Property Taxes
If you recently purchased a home, in addition to annual taxes, you will be responsible for paying supplemental property taxes. The supplemental property tax covers the difference between your purchase price and the sellers purchase price and will be prorated based on the number of months remaining until the end of the fiscal tax year, June 30th. This bill is sent to the new owner after escrow closes- it is NOT prorated in escrow. It is not easy to predict when the bill will be sent, but I have seen them dispensed anywhere from 1 month to 1 year after escrow closed. Consider sending a copy of a supplemental bill to your lender, especially in the event taxes are paid through an impound account. It may be a good idea to call your lender directly to determine if they pay your supplemental tax or if you do. Each lender handles impound accounts differently, and although they may not pay the supplemental bill, they will need it to adjust their monthly collection.
If your taxes are paid through an impound account (included in your mortgage payment), your lender should receive your annual tax bill, and you will receive an informational copy.
A Mello-Roos District is an area where a special property tax on real estate in addition to the normal property tax is imposed on those real property owners within a Community Facilities District. This district has chosen to seek public financing through the sale of bonds for the purpose of financing certain public improvements and services. These services may include streets, water, sewage and drainage, electricity, infrastructure, schools, parks and police protection to newly developing areas. The tax you pay is used to make the payments of principal and interest on the bonds. The charge is attached to your annual property tax bill and the amount can vary each year. For more information, and to find out if the home you are considering purchasing is in a Mello Roos district, click here.
Average Tax Rates
Tax rates vary from city to city. Items that can affect your rate are: Mello Roos, assessments and propositions recently passed. The average rate is 1.25% – 1.65% of the sales price.
Property may be sold at public auction after five years of delinquency.