Supplemental Tax Bills to New Home-buyers
Purchasing a home in California can be a complicated process. While the process can become confusing at times, there is no more confusing aspect of your purchase than deciphering your Supplemental Tax Bill. Even the most experienced real estate agent can have trouble with this one, and the Assessor’s Office wants to ensure no one pays more than their fair share. So when this bill arrives in your mailbox, DON’T BLOW IT OFF! Do not assume it was paid in your closing escrow (it wasn’t), or that because you have your taxes impounded, your lender will pay it (they won’t). You need to pay this additional tax. It is yours, it has been fairly assessed, and it must be paid in a timely manner.
Simply put, a Supplemental Tax Bill is a one-time bill that pays the County the difference between what the taxes were for the seller, and what they are now for the buyer. This amount is prorated from the time of closing escrow until the time the Assessor learns that there is a new owner and the Treasurer-Tax Collector can send a new, up-to-date property tax bill.
REMEMBER: this not a penalty but merely catching-up from day one of the new ownership until the date the new tax records can reflect the new annual tax amount.
The frustration about a Supplemental Tax Bill is that almost all buyers have forgotten about it by the time it comes in the mail, because at its fastest rate, it will take 6 to 9 months to receive. Unfortunately, this is the nature of real estate transactions.
NOTE: This information is not intended as a complete guide regarding property tax laws. Information here has been derived in part from written and oral opinions from the California State Board of Equalization.