Did you just buy a home? Did you recently add a pool or casita? Then don`t be surprised if you receive a supplemental property tax bill in the mail
Anytime a property is sold to a new owner or new construction is completed such as adding a pool or casita, state law says the property value must be reassessed by the County.
When the assessed value changes, the County will send out a supplemental property tax bill which can sometimes take up to 6 months to receive.
For example, let`s say you buy a home in May, your property tax bill that you receive will more than likely still reflect the previous owner’s valuation on the property. Therefore you will get a supplemental tax bill for the difference between the Seller`s property value according to current tax roles and the new value determined by the sold price.
In California, under Prop 13, the annual property tax rate is limited to 1% of the assessed value. However some cities add on additional assessments due to voter-approved bonds to help pay for schools, sewer, emergency fees etc. Such is the case in Palm Desert which has added on approximately .25% to the standard 1% property tax.
Every year the county has the right to adjust property taxes to account for inflation, but in California the maximum upward adjustment cannot be more than 2% per year. However, when a home changes ownership, then the value is automatically reassessed at 1.25% of the sale price of the home.
Keep in mind the standard property tax rate in Palm Desert is approximately 1.25% of the sold price, but "supplemental property taxes" are calculated at a flat 1% fee.
How to Calculate Your Supplemental Property Tax Bill
To calculate your supplemental tax bill, subtract the home’s current assessed value on the tax roles from the new market value based on the sale price of the home. You are taxed on that difference.
Next, the County assessor`s office prorates what you owe based on the number of months left in the fiscal year which ends June 30th
Finally, the 1% tax rate is applied to that amount to determine the supplemental tax due.
Information deemed accurate but not guaranteed.
Example
Using the above example, the difference between the current assessed value and the new sales price was $300,000. The new owner bought in November which triggered a .67% time of ownership factor times the 1% property tax rate until the end of the fiscal year June 30th resulting in a supplemental tax bill of $2,010.
For more information call the Riverside County Tax Assessor`s office @ 951-955-6200
Supplemental Property Tax Bills Can Be Confusing