What are Supplemental Property Taxes?
The Supplemental property tax law was signed by the Governor of California in July of 1983 and is part of an ambitious drive to aid California’s schools. It is expected to produce over $300 million per year in revenue to aid California’s Schools.
Who does it Affect?
Supplemental property taxes only affect those individuals who are initiating new construction or buying property. Once the construction or purchase is complete, the new owner will receive the Supplemental Property Tax bill, which will become a lien against the property.
All Supplemental taxes are payable in two equal installments and are typically not prorated in escrow. Your lender’s impound account does not provide for additional supplemental taxes as they are not pro-rates in escrow, unless there is an unpaid supplemental bill outstanding at the time escrow closes.
When Will The Bill Come?
Once you have closed escrow on your property, the assessor may appraise the property. You can be billed in as few as three weeks or it could take more than six months. Timing will depend upon the individual county workload of the County Assessor, the County Controller/Auditor and the County Tax Collector. 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, which disputes the new tax valuation.
Who Pays Them?
The buyer does. Supplemental taxes that are assessed due to a change in ownership are not prorated in escrow since they are incurred on the date of the transfer of title. As such, they are the responsibility of buyer. Supplemental tax bills are not mailed to your lender. If you have arranged for your property tax payments to be paid through an impound account, the supplemental tax bills will not be paid by your lender, and it is your responsibility to pay these supplemental bills directly to the Tax Collector, as these bills are in addition to the regular annual tax bills.