In California, when there is a change in ownership of real property or when raw construction is completed, the County Assessor will appraise the property changing ownership, or the new construction at its full cash value as of the date the change in ownership occurs or the new construction is completed. The appraised value then becomes the new base year value for the property.
There may be one or two supplemental assessments made depending on the date when the change in ownership takes place or when the new construction is completed.
If the change in ownership occurs, or the new construction is completed after January 1, but before May 31, there will be two supplemental assessments. The first assessment is the difference between the new base year value and the taxable value on the current roll. The second assessment will vary depending on the triggering event. For new construction, the second assessment is the value change due to the new construction. For a change in ownership of a full ownership interest, the second assessment is the difference between the new base year value and the taxable value to be enrolled on the roll being prepared. For a change of a partial ownership interest, the second assessment is the difference between the total of the new base year value for the interest conveyed, plus the taxable value of the rest of the property on the roll being prepared, and the taxable value of the entire property on the roll being prepared.
If the change in ownership occurs, or the new construction is completed on or after June 1, but before the following January 1, there will be one supplemental assessment made for the difference between the new base year value and the taxable value on the current roll.
Taxes resulting from a supplemental assessment are payable in two installments and are due on the date the bill is mailed. However, installments become delinquent on different dates depending on the date of mailing.
If the bill is mailed within the months of July through October, the first installment becomes delinquent on December 10 with the second installment becoming delinquent on April 10 of the following year.
If the bill is mailed within the months of November through June, the first installment becomes delinquent on the last day of the month following the month in which the bill is mailed. The second installment becomes delinquent on the last day of the fourth calendar month following the date the first installment is delinquent.
Frequently Asked Questions about Supplemental Property Taxes
Q: How will Supplemental Property Taxes affect me?
A: If you don’t plan on buying new property or undertaking new construction this new tax will not affect you at all. If you do wish to do either of the two, you will be required to pay a supplemental property tax which will become a lien against your property as of the date of ownership change or the date of completion of new construction.
Q: When and how will I be billed?
A: “When” is not easy to predict. You could be billed in as few as three weeks, or it could take over six months. “When” will depend on the individual County and the workload of the County Assessor, the County Controller/Auditor and the County Tax Collector. The Assessor will appraise your property and advise you of the new supplemental assessment amount. At that time you will have the opportunity to discuss your valuation, apply for a Homeowner’s Exemption and be informed of your right to file an Assessment Appeal. The County will then calculate the amount of the supplemental tax and the Tax Collector will mail you a supplemental tax bill. The supplemental tax bill will identify, among other things, the following information: the amount of the supplemental tax and the date on which the taxes will become delinquent.
Q: Can you give me an idea of how the proration factor works?
A: The supplemental tax becomes effective on the first day of the month following the month in which the change of ownership or completion of the new construction actually occurs. If the effective date is July 1st, then there will be no supplemental assessment on the current tax roll and the entire supplemental assessment will be made to the tax roll being prepared which will then reflect the full cash value. In the event the effective date is not July 1st, then a table of factors would be used to compute the supplemental assessment on the current tax roll.
Reprinted with permission from the California Land Title Association.