All about Real Estate Property Taxes

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All about Real Estate Property Taxes

Tax Dates to Remember:
January 1 – Lien Date – Taxes attach as lien on property.
February 1 – Second Installment Due – secured property tax bill
April 10 – Last day to pay second installment of secured property tax bill before penalties are added
July – Assessor delivers property tax roll to auditor-controller
Assessor mails value notices
July 2 – First day to file assessment appeal(dated Jan. 1 to July 1)
Sept. 15 – Last day to file assessment appeal(dated Jan. 1 to  July 1)
November 1 – First Installment Due – secured property tax bill
December 10 – Last day to pay first installment of secured property tax bill before penalties are added

Supplemental Taxes
The first year of owning a new home can be confusing because of the government cycle for assessing property and sending out tax bills.

The tax assessors office sends out property tax bills every year in September, based on the property’s assessed value on January 1st of that year.  A supplemental tax bill is sent out separately, covering the difference between the previous owner’s property value and your purchase price.

The tax bill is based on the county fiscal year from July 1 to June 30.  Depending on when you bought your property, or completed your new construction on a new home, you may get one or two supplemental tax bills.  Here is an example:
If you bought your house on August 31 of 2008 for $500,000 and the house previously was valued at $200,000.  The tax bill that the assessors office sent in September of 2008 was based on the previous owner’s $200,000 value as of January 2008, and was for the fiscal year that ends June 30, 2009.  The seller should have paid part of that tax (from July 1 to Aug. 31 2008) when escrow closed.

A supplemental bill, usually sent three to six months after the purchase (depending on when the assessor’s office forwards the necessary data), will cover the additional $300,000 in value for the current fiscal year.

If, however, you bought the house between Jan. 1 and May 31, 2008, your tax bill would straddle two fiscal years.  Hence, if you bought on March 31, 2008, then you would receive one supplemental tax bill for the difference in value for the April 1, to June 30, 2008, period.  You would also receive a second bill for July 1, 2008 to June 30, 2009.

Proposition 13 Taxable Value

Proposition 13 was adopted by California voters in 1978, and changed the definition of taxable value for all real property in the state.

Taxable value of real property is now defined as the:

*  Factored Base Year Value(FBYV), or
*  Market value on lien date (January 1st), whichever is lower

Proposition 13 establishes a base year value for real estate and limits increases in taxable value.  Base year value is determined as follows:

*  The base year value of property acquired BEFORE MARCH 1, 1975 is the 1975 assessed value
*  The base year value of property acquired ON OR AFTER MARCH 1, 1975 is usually the market value when the property was transferred

Increases in Taxable Value – The 2% CPI Issue
There are three main reasons your taxable value can increase more than 2% in one year:
*  A change of ownership
* New Construction
*  Temporary reduction(s) in taxable value in prior years.

How do you calculate property taxes?

A: The taxes are calculated by the Auditor-Controller and vary from area to area.  In Orange County the tax rates average approximately 1.1% of the property’s taxable value.  Therefore, if the taxable value of your property is $1,000,000, the property taxes would be approximately 11,000 per year.

Mariners Escrow is an independent, full service escrow company with over 28 years of experience.  We have proven ourselves over the years to be a leader in our industry through both good and bad real estate markets.  Our fees are extremely competitive and in most cases, lower than our competitors in the surrounding areas. Our level of service and professionalism is unparalleled, easily exemplified by our reputation, clientele and repeat business.  Please call us on your next transaction for a competitive fee quote.

About Author

Sean McCracken

As the OC Realtor I’ll help you find your special OC Coastal home at that special price. With my hand holding, I’ll take you through the buying process for the minimal amount of pain - Call Me @ 949-290-5317


Delbert Imler

September 18, 2010 at 8:23 pm

Great info! I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Gertrudis Jubran

September 20, 2010 at 8:48 am

What a write!! Very informative and also easy to understand. Looking for more such writeups!! Do you have a twitter?
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