How Do California Property Taxes Work: When are They Due and How is My Tax Basis Figured.

By: Deborah Cole

Homeowners are often confused about how their property taxes are determined and when they are collected. Property taxes are based on the assessed value (tax basis) of a home which changes whenever title to the property changes hands. (When it is sold and the sale is recorded at the County.) The County adjusts the assessed value for figuring the property taxes to match the sale price of the property. 

California is on a mid-year fiscal year which is why the 1st installment payment for the first half of the year from July 1st to December 31st is due on November 1st and late on December 10th. The 2nd installment for the fiscal year covers from January 1st to June 30th and is due on February 1st and late on April 10th. 

The County sends the tax bill for the entire year at the same time in October. The homewowner is responsible for hanging on to their installment payment stubs and for paying both installments on time. There is a hefty 10% penantly on late tax payments. They do not send reminders but they will send a new bill upon request.

Depending on when the sale occurs and the taxes are due, if there is not time to update the tax bill accordingly, the County may send a tax statement to the new owner based on the value of the home before they purchased followed by a supplemental tax bill to reflect the difference in the former tax basis of the property and the new one. In other words, the buyer is paying a tax bill at the same amount as was assessed to the seller, plus the difference between the former assessment and the new assessment.

If there is time for the County tax collector's office to update the tax assessment, a new buyer may receive only one tax bill that has been updated to reflect the new assessed value and no supplemental bill. (The simple way to check is to look for the assessed value on the tax bill.)

NOTE: When a home sale transaction is closed, the taxes are prorated to the day by the escrow officer and paid by the seller and buyer for their portions through escrow.  

For a detailed explanation from the County of Marin website click here. For a handy tax calendar from Old Republic Title Company click here.

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