Supplemental Taxes

Supplemental property taxes are additional property taxes that result from a reassessment of your property after a change in ownership or completion of new construction.

Under Proposition 13 (passed in 1978), California properties are assessed at their purchase price and can only increase by a maximum of 2% per year. When a property is sold, it's reassessed at the new purchase price, which often creates a difference between the old assessment and the new one.

The supplemental property tax was established by Senate Bill 813 in July 1983. This legislation required counties to immediately reassess property upon change of ownership or new construction, rather than waiting until the next fiscal year.

As a new property owner, you will receive one or two supplemental tax bills in addition to your regular annual property tax bill:

• If the purchase results in a higher assessed value (which is typical), you'll owe additional taxes for the remainder of the current fiscal year.
• If the purchase results in a lower assessed value (less common), you may receive a refund.

Depending on when you close escrow, you may receive either one or two supplemental tax bills:

• Close between July 1 - December 31: You'll receive TWO supplemental bills
• Close between January 1 - June 30: You'll receive ONE supplemental bill

Supplemental tax bills are typically mailed 60-90 days after the change of ownership is recorded. The bill will come directly from your county's tax collector.

Important: These bills are NOT included in your mortgage impound account. You are responsible for paying them directly to the county tax collector.

Yes! Like regular property taxes, supplemental taxes can be paid in two installments:

• First Installment: Due upon receipt, delinquent 30 days after date on bill
• Second Installment: Due upon receipt, delinquent 30 days after first installment delinquency date