Supplemental Property Tax Assessment
Quite often we begin management for a property immediately after the purchase escrow closes. There are good reasons for a new property owner to start this way but those are for another post.
When a property is sold, it is reassessed for property tax purposes. The supplemental assessment represents the difference between the property’s “new base year value” and its existing taxable value. In other words, the supplemental assessment is an additional bill for the tax due on the increased value of the property (presuming it went up at the time of purchase). The County usually notifies the new owners within a few months after the closing of the purchase escrow.
If the close of escrow occurred between January 1st and May 31st, two supplemental assessments are issued: one for the difference between the new base year value and the taxable value appearing on the current assessment roll and another for the difference between the new base year value and the taxable value that will appear on the assessment roll being prepared.
That is confusing but rest assured, the county will not likely under assess the property. But as the new owner you need to be sure that you are not being over assessed, or assessed more than once for a particular tax year, which is July 1st through June 30th in California. First, check that the new assessed value is not greater than the price you paid for the property. Second, when you receive a special assessment tax bill, be sure you haven’t already paid the tax through the purchase escrow, which often it is, or when you received an earlier notice of supplemental assessment.