You Gotta Pay to Play

It’s the first week of November and the first-half property taxes are now due here in San Diego.  If you don’t already know the property tax year runs from July 1 to June 30.  The first half is due November 1 and becomes delinquent on December 10 & the second half becomes delinquent on April 10.  For those of you who just bought a home there is one more surprise that is a reminder you gotta pay to play in this home ownership game.

The GreenHouse GroupMany of my clients purchase homes, move in, get settled, and are then surprised when a supplemental property tax bill arrives. This can be especially concerning to those who chose to have an impound account so their lender pays their property taxes.  But the supplemental bill is not part of the regular property taxes and arrives a few weeks to up to a few months after closing.

Here are a few of the top questions I get from my clients regarding supplemental taxes:

What is the Supplemental Tax Bill?

It is a one-time tax that is sent out when the property is reassessed by the county assessor.

How will the amount of my bill be determined?

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.

Can you give me an idea of how the proration factor works?

The supplemental tax becomes 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 the table of factors represented on the
following panel is used to compute the supplemental assessment on the current tax roll.

If the Effective Date is:  The Proration Factor is:  If The Effective Date is:  The Proration Factor is:
August 1st                            92¢                                         February 1st                           42¢
September 1st                        83¢                                           March 1st                              33¢
October 1st                           75¢                                            April 1st                                25¢
November 1st                        67¢                                             May 1st                                 17¢
December 1st                        58¢                                             June 1st                                8¢
January 1st                          50¢

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.

By David Hughson

858-863-0264

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The GreenHouse Group, Inc. | Real Estate Consulting & Mortgage Planning. "Moving People With Purpose."

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