I recently purchased a house and received my property tax bill, but I also received two supplemental tax bills. What's going on?
The first year of owning a new home can be confusing because of the government cycle for assessing property and sending out tax bills. Property tax bills are sent every September or October and are based on the property's assessed value on January 1st of that year. The first installment payment is due no later than December 10th, and the second installment payment is due no later than April 10th.
Supplemental tax bills are sent out separately from the regular bills and cover the difference between the previous owner's assessed value and the new purchase price. Because the County operates on a July-June fiscal year, some people will receive more than one supplemental tax bills depending on when the property was purchased or new construction was completed.
For example, if you bought your house on August 31st for $500,000 and the house was previously assessed for $200,000, the regular tax bill will be based on the previous owner's lower value as of January 1st. The seller should have paid part of the taxes (from July 1 to Aug 31) covering their ownership period up until escrow closed. A supplemental tax bill, usually sent three to six months after the purchase,will cover taxes for the additional $300,000 in value for the current fiscal year.
If you bought your house on May 31st, your tax bill would straddle two fiscal years. You would receive a supplemental tax bill for the pro-rated difference in value between April 1st and June 30th, and a second bill for the period July 1st to June 30th of the following year.
PLEASE NOTE: If your taxes are impounded by your mortgage company, the supplemental taxes are generally not covered and the taxpayer must pay them separately! Please call our office if you have any questions.
This is how secured property taxes are handled under Proposition 13 for the taxes incurred during transitions between sellers and buyers. Property taxes under Prop. 13 are based on 1% of the purchase price of your home. The bills may be higher than 1% due to special assessments in your taxing district for sanitation, water districts, vector control, bond issuances and Mello-Roos charges.
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