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John Saldivar, Home Owner in Pinole, CA

Question regarding Supplemental Property Taxes

Asked by John Saldivar, Pinole, CA Thu Jun 14, 2012

My wife and I recently purchased a home in Pinole last year in July, I just received a bill from the County for Supplemental Property Taxes. Our regular property taxes are paid through our loan agreement. From my understanding we are required to pay Supplemental Property Taxes out of pocket. Which runs close to 4,000 total. Is this a tax that we are required to pay each year. also our reular property taxes is far less close to 2000 annually.

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Supplemental taxes are paid one time after you purchase the home. The supplemental tax is the difference between the amount you will pay annually and the amount the seller paid annually. Collecting supplemental taxes is a crazy, wasteful and stupid system, but here is how it works.
Let's say the seller bought the house years ago for $X and his yearly property taxes are $1,200 - or $100 per month. You buy the house for twice as much as the seller bought it for and close escrow 2 months before the next tax bill is due. Since the seller already paid taxes for two months, you reimburse the seller $200 as part of the closing costs at time of purchase.
But wait! Since you bought the home for twice as much as the seller paid, your assessed value is twice as much. Therefore, you actually owe $400 for those two months. This is where the stupidity kicks in. You should be able to reimburse the seller for the $200 they already paid plus pay the county the additional $200 and be done with it, but NOOOOO. That would be too easy. Instead, the county must have a complete department preparing supplemental bills and processing them - a complete waste. I'd gladly support any ballot proposition that requires mandatory prison sentences for government officials who allow this system to continue.
One other clarification: you may get supplemental tax bills in the future if the county re-assesses your property to a higher value.
0 votes Thank Flag Link Thu Jun 14, 2012
Don't "F" with Supplementals. They are the only reason Prop 13 still works. ALL Californians will be screwed and almost allwill lose theri home, if Prop 13 is repealed. It is VERY irresponsible of you to make the above statement. Most Californians know very little to nothing about Prop 13, or how it works, but they all already hate the supplementals.
Flag Thu Jun 14, 2012
In general, Supplemental Property Taxes are a one time thing. They usually result in differences in valuation from previous tax base to current. It could also result in improvements that you may have done to the property like a room addition, adding a pool etc.. Hope this helps.
0 votes Thank Flag Link Thu Jun 14, 2012
Thanks for the info, helps us out a lot
0 votes Thank Flag Link Thu Jun 14, 2012
You are very welcome and I'm glad it was helpful.
Flag Thu Jun 14, 2012
Hi John,

Thankfully, I'm sure, the supplemental tax is a one-time adjustment to cover the increase in value of the property brought about by your purchase.

After this, valuations are based on the County Assessor’s valuation (which can be challenged via a Prop 8 Appeal - see blog post below, also see the supplemental tax paragraph that touches on how the buyer "adopts" the seller's tax basis for a short time).

"Estimating Property Taxes in CA"
http://www.trulia.com/blog/steve_ornellas_mba_re_mastersgri/…

-Steve
0 votes Thank Flag Link Thu Jun 14, 2012
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