Tuesday, April 26, 2005

Preparing Yourself for a Supplemental Property Tax

When purchasing a home, buyers do not often realize they will be receiving a Supplemental Tax Bill. This is a one time tax that is the sole responsibility of the buyer to pay and is not pro-rated in escrow. It is intended to capture the difference between the old tax base that the seller was paying and the new tax base on which the buyer will be paying. The bill is pro-rated based on the date of change of ownership within the fiscal year. The County Assessor will reappraise the property as of the date of change of ownership at Market Value and the buyer will subsequently receive a Supplemental Notice and Tax Bill.
Something for a buyer to consider, for budget reasons, is how long has the prior owner lived in the home to be purchased? If the prior owner has lived in the property for many years, they probably have had a low tax base under Proposition 13. This means that the buyer will more than likely have a higher Supplemental Tax to pay. A buyer might even take this into consideration when making an offer on a home.

Janis Calkins
(805) 218-7016


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