Understanding supplemental property taxes
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Understanding supplemental property taxes
Dear Phyllis,
You cover a variety of real estate topics. However, I don’t believe you have ever written about supplemental property taxes. I was the executor of my Uncle’s estate in San Diego. We closed escrow in February, and I received a supplemental tax bill for nearly $3,000.00. I asked our Realtor, who directed me to the county assessor’s office. To sum up, it seems that I do need to pay. I am hoping that you will assist me in understanding supplemental taxes and also how they are calculated.
Dan M.
Dear Dan,
Current California law reassesses the property when there is a change of ownership to a home.
State law requires the Assessor to reappraise a property when ownership changes. The supplemental assessment calculates the difference between the old value and the new value. This is not a penalty. Instead, it adjusts the taxes to reflect the new value from the date of transfer to the closing date. In effect, it acts as a catch-up bill. It collects the difference between the taxes owed at the time of death and the taxes owed after the reassessment.
For example, assume your uncle’s home had an assessed value of $600,000 and sold for $900,000. You must pay property taxes on the additional $300,000. The county calculates this amount from the date of death through the close of escrow. It prorates the tax based on the number of days in that period.
It can be frustrating that counties often issue supplemental bills months later. However, you must still pay this tax. Pay it promptly to avoid penalties.
I agree with this reader. It seems like a very sneaky tax but California is especially good at those