At Lucas Real Estate, we pride ourselves on being experts in all aspects of real estate, including property taxation. Understanding how taxes affect your property is crucial for making informed decisions as a homeowner or investor. In this blog, we delve into a common yet often misunderstood topic: supplemental property taxes in California. By shedding light on this subject, we aim to empower you with knowledge and insight to navigate the complexities of real estate taxation with confidence.

To help you better understand this confusing subject, the California Land Title Association has answered some of the questions most commonly asked about supplemental real property taxes.

Q. When did these taxes come into effect?
A. The Supplemental Real Property Tax Law was signed by the Governor in July of 1983 and is part of an ambitious drive to aid California’s schools. This property tax revision is expected to produce over $300 million per year in revenue for schools.

Q. How will supplemental property taxes affect me?
A. If you don’t plan on buying new property or undertaking new construction, these taxes will not affect you at all. But if you wish to do either of these things, you will be required to pay a supplemental property taxes which will become a lien against your property as of the date of ownership change or the date of completion of new construction.

Q. When and how will I be billed?
A. “When” is not easy to predict. You could be billed in as few as three weeks, or it could take over six months. “When” will depend on the individual county and the workload of the County Assessor, the County Controller/Auditor and the County Tax Collector. The assessor will appraise your property and advise you of the new supplemental assessment amount. At that time you will have the opportunity to discuss your valuation, apply for a Homeowner’s Exemption, and be informed of your right to file an Assessment Appeal. The County will then calculate the amount of the supplemental tax and the tax collector will mail you a supplemental taxes bill. The supplemental tax bill will identify, among other things, the following information: the amount of the supplemental taxes and the date on which the they will become delinquent.

Q. Can I pay my supplemental tax bill in installments?
A. All supplemental taxes on the secured roll are payable in two equal installments. The taxes are due on the date the bill is mailed and are delinquent on specified dates depending on the month the bill is mailed as follows:

If the bill is mailed within the months of July through October, the first installment shall become delinquent on December 10 of the same year. The second installment shall become delinquent on April 10 of the next year.
If the bill is mailed within the months of November through June, the first installment shall become delinquent on the last day of the month following the month in which the bill is mailed. The second installment shall become delinquent on the last day of the fourth calendar month following the date the first installment is delinquent.

Q. How will the amount of my bill be determined?
A. There is a formula used to determine your tax bill. The total supplemental assessment will be prorated based on the number of months remaining until the end of the tax year, June 30.

Q. Can you give me an idea of how the proration factor works?
A. The supplemental taxes become effective on the first day of the month following the month in which the change of ownership or completion of new construction actually occurred. If the effective date is July 1, then there will be no supplemental assessment on the current tax roll and the entire supplemental assessment will be made to the tax roll being prepared, which will then reflect the full cash value. In the event the effective date is not on July 1, then a prorated amount will be applied.

EXAMPLE: The County Auditor finds that the supplemental property taxes on your new home would be $1,000 for a full year. The change of ownership took place on September 15 with the effective date being October 1; the supplemental property taxes would, therefore, be subject to a proration factor of .75 and your supplemental tax would be $750.

Q. Will my taxes be prorated in escrow?
A. No, unlike your ordinary annual taxes, the supplemental taxes are a one-time tax which dates from the date you take ownership of your property or complete the construction until the end of the tax year on June 30. The obligation for these taxes is entirely that of the property owner.

Please check with your state or local land title association for applicable laws.

At Lucas Real Estate, we understand the complexities of property taxation in California. Whether you’re in Newport Beach, Costa Mesa, or beyond, we’re here to provide expert guidance and support tailored to your specific needs. Contact us today for personalized assistance.

– Devin Lucas

Author Devin R. Lucas is a REALTOR®, Real Estate Attorney and real estate Broker and specializing in Newport Beach, Costa Mesa and Orange County coastal communities, serving individuals, Trustees and investors in residential real estate.

Lucas Real Estate – Attorney Devin Lucas and CPA Courtney Lucas – are experts in residential real estate transactions, tax considerations, Trustee representation and California’s Proposition 19.

Lucas Real Estate
REALTORS® and related Real Estate Law & Tax Considerations
lucas-real-estate.com | devin@lucas-real-estate.com | BRE No. 01912302
949.478.1623 office
2901 West Coast Highway Suite 200
Newport Beach | California | 92663-4023

Lucas Real Estate is a unique full-service residential real estate brokerage providing related residential real estate legal services and real estate tax considerations and planning, based in Newport Beach, California.

Devin Lucas is a licensed California Real Estate Attorney, Real Estate Broker and REALTOR® | Courtney Lucas is a California licensed CPA and REALTOR®

Source: Lawyer’s Title. https://page.fnf.com/rs/393-REY-847/images/2022-07-SupplementalPropertyTaxes-Flyer.pdf

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The content on this blog is for informational purposes only. Nothing on this blog should be construed to be legal advice, and you should not act or refrain from acting on the basis of any content on this blog without seeking appropriate legal advice regarding your particular situation, from an attorney licensed to practice law in your state. The content on this blog is not guaranteed to be correct, complete, or up to date. Devin R. Lucas’ office is in Newport Beach, California and is only licensed to practice law in California. Please be advised that Devin R. Lucas only provides legal services or advice pursuant to a written legal services agreement. The content on this blog is not intended to, and does not, create an attorney-client relationship between you and Devin R. Lucas, nor does our receipt of an email or other communication from you. Some jurisdictions may consider this site to constitute attorney advertising; accordingly, please be advised this is an advertisement.

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