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Home Buying

"What happens when I buy a home?
Don't Let Your Dream Home Become Your Tax Nightmare."

This pamphlet, produced by the Santa Cruz County Assessor explains the tax implications of buying a home.


After I buy my home when will I receive the tax bill?

All outstanding taxes are dealt with in escrow. Annual taxes are delinquent after December 10 for the 1st installment and April 10 for the 2nd installment. Depending on when you closed escrow, the current annual bill may be paid or still owed. Check your closing statement to see how it was settled and whether there are upcoming taxes for which you are responsible. You may wish to call the Treasurer/Tax Collector to verify the information.

In addition, after your deed is recorded, the Assessor processes the transfer by assessing the property at fair market value (usually the purchase price). You will receive a Notice of Supplemental Assessment within a week of this processing. 45 days later you will receive a supplemental bill(s). January through May transfers receive two supplemental bills. June through December transfers receive one supplemental bill.

If I pay my property taxes through an impound account (i.e., with my mortgage payment), will my lender get my supplemental bill?

No. Unlike the annual tax bill, lending agencies do not receive a copy of the supplemental tax bill. When you receive a supplemental tax bill, you must contact your lender to determine who will pay the bill.

What if I purchase my home and then sell it again after a few months?

If you purchase and then sell your property within a short period of time, the supplemental tax bill you receive should cover only those months during which you owned the property. The new owner will receive a separate supplemental tax bill. Because of the large number of parcels and the frequency of property changing hands, there are often delays in placing new assessments on the roll. Be sure to check the dates used to prorate the bill to ensure that the period covered is the period during which you actually owned the property. Don't try to calculate the tax on your own. If you send an estimated amount, the Tax Collector will be forced to return your payment.

As a new homeowner, what should I look for on my tax bill?

The supplemental tax bill provides the following information:

  • The owner(s) name(s).
  • The fiscal year for which the taxes are assessed.
  • The location of the property.
  • The old and the new assessed value and the difference (net supplemental assessment) upon which the tax is computed.
  • The type and amount of any exemptions (e.g. homeowner's).
  • The total amount of taxes due based upon the net increase in value.
  • The first day of the month following ownership change. This date is used to prorate the tax for the period remaining in the current fiscal year for which the bill was issued.

 

The bill may be paid in two installments and provides payment stubs for each installment. These show the amount due and the date that the amount must be paid to avoid penalties for late payment. You should check all of this information to see that it is correct. Any mistakes should be brought to the attention of Tax Cycle Personnel (Assessor, Tax Collector, Auditor) immediately

How can I figure out the taxes on my new home?

The basic tax rate (according to Prop 13) is 1% of assessed value. Many properties have a higher tax rate and may also be subject to special levies. You will need to make reference to your specific parcel to find the actual tax rate and whether special levies apply.

Is everyone who buys a new home taxed the same?

The California Revenue & Taxation Code is extremely complex. Since the passage of Prop 13 there have been numerous additions, corrections, and deletions to the law. There are exemptions and exclusions too numerous to mention in a simple consumer pamphlet. The best advice is to check with the local Assessor to see if you qualify for special processing of your transfer. You are encouraged to review some of the other pamphlets which are available relating to specific topics such as: Homeowner's Exemption, Parent Child Exclusion, Intra-County Base Year Transfer, Builder's Exclusion, etc.

What if I disagree with the Assessor's value?

You should first call the Assessor's Office to discuss the assessment (454-2002). You may talk directly to the appraiser and, often the matter is settled right at that level. If there is still a clear difference of opinion you must file an appeal within sixty days of the mailing date shown on the Notification of Supplemental Assessment. If you choose to appeal your assessment, you should still pay your tax installments in full by the appropriate deadlines; otherwise, you may incur penalties while the case is in appeals. If your appeal is granted, a refund will be issued to you.

Should you have any further questions please contact the County Assessor at 454-2002.


 
                           "THE SUPPLEMENTAL JOURNEY"
                           ==========================
 
                             IF YOU BUY NEW PROPERTY
                                       or
                            COMPLETE NEW CONSTRUCTION
                                       |
                 -----------------------------------------------
                 |                                             |
--------------------------------------        --------------------------------------            
   Between June 1 and December 31*                 Between January 1 and May 31*         
--------------------------------------        --------------------------------------
                 |                                             | 
                 |                                             |
                 |       THEN YOU WILL BE RESPONSIBLE FOR:     |         
                 |            THE CURRENT FISCAL YEAR          |
                 |                                             | 
--------------------------------------        --------------------------------------
   Your portion of Annual Tax Bill**              Your portion of Annual Tax Bill**
   for current fiscal year,                       for current fiscal year,  
   reflecting prior assessed value.               reflecting prior assessed value.
--------------------------------------        --------------------------------------
                 |                                             |
                 |                                             |
--------------------------------------        --------------------------------------
   Supplemental Tax Bill for                      First Supplemental Tax Bill for
   remainder of current fiscal year,              remainder of current fiscal year,
   reflecting difference between new              reflecting difference between new
   and prior assessed values.                     and prior assessed values. 
--------------------------------------        --------------------------------------
                 |                                              |
                 |                                              |
                 |                              Since the change in value occured 
                 |                              after the January 1 lien date and 
                 |                              will not be reflected on the annual
                 |                              tax bill for the upcoming year, you
                 |                              will receive:   |
                 |                                              |
                 |                                              |
                 |            FOR UPCOMING FISCAL YEAR:         |
                 |                                              |
--------------------------------------        --------------------------------------
   Annual Tax Bill ** for upcoming                Annual Tax Bill ** for upcoming
   fiscal year reflecting new                     fiscal year reflecting value of 
   assessed value.                                the January 1 annual assessment. 
--------------------------------------        --------------------------------------
                                                                |
                                                                |
Note:                                                           | 
There are sometimes delays in placing                           |
supplemental assessments on the tax roll.     --------------------------------------
Thus, the increase in assessed value might        Second Supplemental Tax Bill for
not be placed on the tax roll until after         entire upcoming fiscal year, 
March, in which case you will receive two         reflecting difference between 
supplemental bills (see right-hand column)         new and prior assessed values.
                                              --------------------------------------     
 
 
REMEMBER:
*  Taxes on the increase in assessed property value due to ownership changes or
completion of new construction are calculated as of the first day of the month
following the date of ownership change or construction completion.
 
** Property is reassessed each January 1 for the upcoming fiscal year (July l-June 30).