What is this extra tax bill I got? | Supplemental Tax Bills Explained
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What is this extra tax bill I got? | Supplemental Tax Bills Explained


Hello and welcome to this week’s edition of The Mortgage Minute. I am Laura Borja, your San Diego home loan expert. In today’s edition we’re going to be talking about supplemental tax bills. Why are supplemental tax bills issued? In California law requires that a property be reassessed whenever there is a change of ownership or upon completion of new construction. The supplemental tax bill, which is a separate bill from the annual property tax bill, reflects the difference between the old assessed value and the new assessed value. The calculation of your supplemental taxes is dependent not just on the old value versus the new value but also on where your purchase falls within that tax year. I know that this graphic looks a little scary but it’s really not. But do check out my video from last week where I explain the annual property taxes. Essentially this just shows you when taxes are due and the fact that the county does run on a fiscal calendar. Let’s just take a look at a quick example Let’s say that you’re awesome loan officer helped You to finance a property that you purchased on sep tember 15 for $450,000. The first step is to establish how many months are left in that fiscal year and in this example that would be 9.5. So let’s do some math. If the new at this value is $450,000 and let’s pretend the prior says value was $350, that leaves a gap of a $100,000. We multiply that by 9.5 because that’s the number of months left in the fiscal year and that gives you a prorated tax value of $75,000 which you are responsible for. If we assume a one-percent tax rate that would create a supplemental tax bill of $750 Let’s take a look at a couple of other details Supplemental tax bills are usually issued within six to 12 months from the change of ownership or completion of the new construction. If your supplemental tax bill is triggered between January 1st and May 31st, it is possible to receive more than one supplemental tax bill so keep an eye out for that. If you have an impound account you should know that unlike the annual property tax bill your mortgage company will not receive the supplemental tax bill. Make sure that you contact them let them know you have it and confirmed that there are sufficient funds available to pay the bill And also the due dates of supplemental tax bills are not necessarily going to match those of the annual tax bill. So make sure you pay attention to those due dates to avoid any late penalties. there you have it a quick look at supplemental taxes here in San Diego county. As always, if you have any questions feel free to send me an email or give me a call. I’ll be happy to help thank you so much for watching this week’s the mortgage minute don’t forget to subscribe and until next time

3 Comments

  • Samuel Garrett

    Thanks for showing the breakdown! Just one correction which threw me: multiply 100k * .75 (the monthly factor) to get 75k

  • ChiquitaBananaPink

    Hello! I am looking for houses in the Antelope Valley area in California. I just spoke to my agent and he said the worse months to buy a house would be July & August or August & September (I forgot which 2) due to the supplemental tax. But he couldn't explain it to me. Is this true?

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