A common question we hear from new homebuyers is, “When are property taxes due in California?” The quick answer is that California property taxes are due in two installments. The 1st installment is due on November 1st and the 2nd installment is due on February 1st.
Below we dive into all the nuances of both secured property taxes and supplemental property taxes in California. If you’re considering buying a home in California, we recommend familiarizing yourself with what to expect in terms of tax costs.
What Is Property Tax in California?
Before we jump into property tax due dates and nuances, let’s clarify what property tax is in California. Property tax is a local tax levied on the value of your real estate, including land and any structures on it. In California, the tax rate is generally 1% of the assessed value of your property, plus any voter-approved bonds and special assessments.
How Much Is Property Tax in California?
Wondering how much you’ll have to shell out? The amount varies by location and the assessed value of your property. For example, Los Angeles County property tax rates may differ from those in San Diego County or Sacramento County. On average, once all local adjustments are applied, the effective property tax rate in California is around 1.3% of your home’s purchase price.
When Are California Property Taxes Due? When Are They Considered Late?
Wondering when are property taxes due in California? Property taxes are due in two installments. The first installment is due on November 1st and is considered delinquent if not paid by December 10th. The second installment is due on February 1st and is considered delinquent if not paid by April 10th.
Are There Different Due Dates in Different Counties?
The due dates for property taxes are consistent across all California counties, from Los Angeles County property tax to Fresno County property tax. So, no matter where you are in the Golden State, mark the dates above on your calendar.
What About California Supplemental Property Tax?
We always make sure our clients are well informed about supplemental property taxes in California before they finalize their new home purchase. And, because a supplemental property tax bill can come at any time after you purchase a new home in California, it is important to know what a supplemental property tax bill is, why you received it, and make sure it is paid on time
What Is a Supplemental Property Tax Bill?
First things first, what is a supplemental property tax bill? Supplemental property tax is a one-time bill that you’ll receive when there’s a reassessment of your property’s value. A property tax reassessment is typically triggered by a change in ownership due to a sale or significant improvements like renovations or additions. A refinance does not trigger a property tax reassessment. The supplemental property tax bill reflects the difference between the old assessed value and the new value and charges you taxes “pro rata” from the date in which the reassessment was triggered. This is separate from your regular, or “secured,” property tax bill, which is an annual obligation.
Why Do Supplemental Property Taxes Exist?
You might be wondering, “Why do I have to pay this extra tax?” Supplemental property taxes exist so that property owners pay taxes based on an accurate calculation of their home’s value. So, if a home sells for far more than the previous owner’s assessed value, or if someone adds $500,000 in improvements to their home, they pay taxes based on that more up-to-date valuation.
How Is Supplemental Property Tax Calculated?
The calculation for your supplemental property tax bill is relatively straightforward. The new assessed value of your property (post-change or improvement) is subtracted from the old assessed value. The difference is then multiplied by the current tax rate to determine your supplemental property tax amount. This amount is also prorated to the date of the change, too. So, if the assessed value increased halfway through the tax year, you only pay for the increase in taxes from that date moving forward rather than for the entire year.
When Will I Receive the Supplemental Bill?
The timing of your supplemental property tax bill can vary. Generally, you can expect to receive it within a few months after the change in ownership or completion of significant improvements. It’s crucial to pay attention to the due dates on this bill, too, as they do not always match the secured property tax bill due dates. And, late payments can result in penalties.
Do You Pay Supplemental Property Tax Every Year?
A common misconception is that supplemental property tax is an annual charge. This is not the case. Supplemental property tax is a one-time bill triggered by specific events like a change in ownership or significant property improvements. However, if you make additional changes to your property that require reassessment, you may receive another supplemental property tax bill.
What Happens If I Sell My Home?
If you sell your property, the new owner will be responsible for any future property tax bills, both secured and supplemental. It is customary that property taxes are prorated during the sale process, based on the sale date. So, you will end up paying for your share of taxes through the date on which you officially sell the home.
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December 4, 2023
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Secured vs Supplemental Property Tax: What’s the Difference?
Secured property tax is your regularly recurring, annual property tax based on the assessed value of your property. Supplemental property tax, on the other hand, is a one-time tax that comes after a reassessment due to changes like ownership transfer or significant improvements.
For more information about property taxes in California, you can visit the California State Board of Equalization website.
Frequently Asked Questions
How Often Are Property Taxes Assessed in California?
In California, property taxes are assessed annually. However, a reassessment can occur when there is a change in ownership or significant improvements to the property, leading to a supplemental property tax bill.
Is There A Limit on How Much My Taxes Can Increase?
What Happens If I Don’t Pay My Property Taxes On Time?
Failing to meet property tax due dates in California can result in penalties. For example, if you miss the December 10 or April 10 deadlines, you’ll face a 10% penalty on the unpaid amount. It’s crucial to pay your property taxes on time to avoid these extra costs. Also, severely delinquent tax bills can become tax liens, which can ultimately result in the loss of your property through a tax lien foreclosure if left unpaid for too long.
What About Property Tax Reassessment in California?
Property tax reassessment in California occurs when there is a change in ownership or significant improvements to the property. This reassessment can result in a supplemental property tax bill, which is separate from your regular property tax bill.
Want To Learn More?
Understanding when property taxes are due in California, as well as the ins and outs of supplemental property taxes, can save you time, stress, and money. At JVM Lending, we’re always here to help you navigate the complexities of California property taxes, from San Diego County to San Francisco and everywhere in between. Knowing all the costs associated with buying a home, including taxes, is necessary in order for you to make the right decisions on your homebuying journey.
If you have more questions about property taxes, supplemental bills, or anything else related to homeownership in California, don’t hesitate to reach out to our team of experts at JVM Lending.
*Please Note: The information provided in this blog post is intended for informational and educational purposes only. JVM Lending is not a tax professional or financial advisor. Property tax laws and regulations can be complex and may vary by location and individual circumstances. We strongly recommend consulting with certified tax professionals for personalized advice and guidance on property tax matters. If you’d like a referral to a tax professional or financial advisor, contact us and we’ll happily refer you to one of the trusted professionals in our network.