PURCHASE

The supplemental tax bill provides a means for the county assessor to re-appraise a property as a result of a reassessment event. Examples of a reassessment event include: a change in ownership, new construction, or additions to a property.

When you buy a new home, this would fall under “change in ownership”. The county assessor will determine the current market value of your property to establish your New Assessed Value. The Old Assessed Value (from the previous owner) is subtracted from the New Assessed Value. This Difference in Value is then multiplied by your property tax rate and prorated based on when you purchased your home. The result is your supplemental tax bill.

For example:

Previous Owner’s Assessed Value: $400,000

Your New Assessed Value: $600,000

Difference in Value: $200,000

Let’s say your tax rate is 1.25%, and you bought the home in October. The proration factor for purchasing in October would be 0.67. Proration factor was used following those listed on the California State Board of Equalization website.

The final calculation would be:

Supplemental Tax Bill = (Difference in Value) x (Tax Rate) x (Proration Factor)

Supplemental Tax Bill = ($200,000) x (0.0125) x (0.67)

Supplemental Tax Bill = $1,675

Keep in mind, the supplemental tax bill is in addition to the regular, annual property tax bill. Also, depending on when you purchase the home, you may end up with one or two supplemental property tax bills.

See the following link for further details and information: California BOE Website – Supplemental Assessment. You can also check your local county website regarding supplemental tax bills. The presented material is for general informational & illustrative purposes only. The above pertains to the state of California.

Presented by: Jesse Haro – NMLS 2023964 | DRE 02134504