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Property and Supplemental Taxes - What You Should Know

By
Mortgage and Lending with CMG Mortgage, San Diego, CA NMLS 259027

Vital Information To Know About Property & Supplemental Taxes

Important: Even if you have an Impound (aka Escrow) Account, you will be responsible to pay any/all Supplemental Tax Bills directly to the County Assessor.

Supplemental Tax Bills are NOT part of your Impound (aka Escrow) Account billing cycle!

If your Close Of Escrow date occurred between December 5th and May 31st, you will receive 2 different Supplemental Tax Bills (both will be your responsibility to pay directly to the County Assessor).

If your Close Of Escrow date occurred between June 1st and December 4th, you will receive 1 Supplemental Tax Bill (which will be your responsibility to pay directly to the County Assessor).

If you have an Impound (aka Escrow) Account, all of the "Standard" Tax Bills will be paid by your Mortgage Servicer between the 2 different Property Tax Installment Periods, which are November 1st - December 10th, and February 1st - April 10th (see chart below)

Property Tax Background & Useful Information

Property Taxes can be challenging to understand...especially with all of the incorrect information floating around cyberspace.  The following information is taken directly from the San Diego County Treasurer website in an effort to help you understand the facts about San Diego Property Taxes. In life, we tend to make better decisions when they are based on facts rather than assumptions.

The table below will demonstrate the economic flow of the money collected regarding your San Diego Property Taxes each installment period.  As you can see, each individual parcel of land acts as a revenue source to offset our local county expenses.

Property Taxes in San Diego - www.GordonMortgage.com

When are San Diego Property Taxes due?

The first installment of secured property tax is due on November 1st and becomes delinquent after December 10th.  The second installment is due February 1st and becomes delinquent after April 10th.  A common "memory hook" that was taught to me when studying for my Real Estate License was "No Darn Fooling Around" (to help memorize the months "November, December, February, and April"). 

Property Tax Delinquencies

The first installment of San Diego Property Taxes becomes delinquent if not paid by December 10th. If the delinquent date falls on the weekend or holiday, the delinquency date is the next business day. The second installment becomes delinquent if not paid by April 10th. Payments received after the delinquent date are assessed a 10% penalty, plus a one-time $10.00 cost on second installment payments.  These fees are not cheap...make sure to pay your property taxes on time!  Setting up an Impound Account with your mortgage Lender can alleviate you of the possibility of incurring late fees (as the responsibility for timely payments is transferred to the Lender).

Understanding Supplemental Tax Bills in San Diego

So often, new Homeowners are blind sighted by their Supplemental Tax Bill. As part of their obligation to pay their San Diego Property Taxes  State Law requires that the San Diego County Assessor reappraise the property upon a change of ownership or new construction. The supplemental assessment targets the difference between the previously assessed value and the new assessed value. If the new value is determined to be higher than the previous value, a supplemental tax bill will be sent to the Homeowner. If the new value is determined to be lower, a refund check will be sent to the Homeowner.

Property Taxes are always prorated to account for the full dates of ownership (and will clearly determine who is responsible for paying the taxes due throughout the year). If a change of ownership occurs between January 1st and May 31st, two supplemental tax bills will be issued. The first supplemental bill will be for the remainder of the fiscal year and the second supplemental tax bill will be for the following fiscal year.

Supplemental Tax Bills are mailed directly to the property owner and are the responsibility of the Homeowner. Typically, Supplemental Tax Bills are NOT paid out of a Borrower's Impound Account. You are recommended to check with your Lender/Servicer for specific details.

Property Taxes in San Diego - www.GordonMortgage.com

Impound / Escrow Accounts

Impound Accounts (also referred to as Escrow Accounts) are an extremely useful financial tool which seeks to prevent a Homeowner from receiving a Property Tax bill that has not been properly budgeted for.  When the Impound Account is created, there is money put into a savings account.  As monthly mortgage payments are made moving forward, a portion of the monthly payment is diverted into the Impound Account (for later use to pay Property Taxes and Homeowners Insurance when they become due).  The amount of the initial deposit when creating the Impound Account is a moving target, based on the time of year the loan funds (and the proximity of that date in relation to the next San Diego Property Tax due date).  Please see the chart below for elaboration. Remember, Supplemental Property Taxes are typically NOT paid out of the Borrower's Impound Account.

Property Taxes in San Diego - www.GordonMortgage.com

Property Tax Calendar

Below is an easy chart to help articulate when San Diego Property Taxes are due and payable throughout the year.

Property Taxes in San Diego - www.GordonMortgage.com

Frequently Asked Questions (FAQ's)

Q: When will I receive my property tax bill?

A: The Treasurer-Tax Collector begins mailing Annual Secured tax bills in late September. If you have not received your tax bill by November 1st, you are advised to contact the Treasurer-Tax Collector. To pay your installments online, visit www.sdtreastax.com

 

Q: What is property tax?

A: Property tax is a value based tax that an owner of real estate or other property pays on the value of the property being taxed. The taxing authority requires and/or performs an appraisal of the monetary value of the property, and the tax is assessed in proportion to that value.

 

Q: How does Proposition 13 affect me?

A: Under State Law (Proposition 13, June 1978), real property is reappraised only when a change-in-ownership occurs, or upon completion of new construction. Except for these two instances, property assessments cannot be increased by more than 2% annually, based on the California Consumer Price Index.

 

Q: When is it due?

A: Annual Secured Tax Bill:

  • 1st Installment is due November 1st and becomes delinquent after December 10th
  • 2nd Installment is due by February 1st and becomes delinquent after April 10th
  • Late penalties attach by operation of law - paying on time will help you avoid penalties
  • Defaulted taxes: Penalties increase monthly!

 

Q: After the purchase of a new home, who will inform me of property tax responsibilities?

A: California law requires that you be responsible for the timely payment of taxes on your property. To find out what taxes are due and owing, visit www.sdtreastax.com

 

Q: What if there are prior year delinquent taxes owing on my new home?

A: Current and prior year taxes should be identified during the escrow process.  The escrow agent will be responsible for determining how much of the property tax the buyer and seller will pay.  If prior year taxes are not paid during the escrow process, they will remain a lien on the property and become the responsibility of the new owner.

 

Q: What is an impound account?

A: An impound account (also called a reserve or escrow account) is a special account set up by a lender to collect money from the borrower to pay future property tax and insurance bills.  Generally, a lender can require an impound account on a mortgage if the loan amount is for 90% or more of the purchase price.

 

Q: What are my Mello Roos Taxes paying for?

A: Your taxes may be paying for both services and facilities.  The services may be financed only to the extent of the new growth.  Services include: police and fire protection, ambulance and paramedics, recreation, the operation and maintenance of parks, parkways, and open space, library services, museum, cultural facilities, flood and storm protection services for the removal of any threatening hazardous substance.

 

Q: Do I have the right to appeal the assessed value?

 

A: Yes. Appeals of supplemental assessments must be filed with the Clerk of the Assessment Appeals Board (not the Assessor) within sixty (60) days of the mailing date shown on the bill you receive. The Assessment Appeals Board acts under the direct authority of the Board of Supervisors and its function is to independently resolve valuation disputes between Assessors and property owners.

For more information about this topic, or any others pertaining to Residential Real Estate Financing, please contact Jason Gordon at 619-200-8031, or visit www.GordonMortgage.com

 

Thank you for taking the time to review this article.  I hope the above information helps you to further your understanding of San Diego Property Taxes.

Robert Vegas Bob Swetz
Las Vegas, NV

Hello Jason ... very interesting post and featured to the group:

CALIFORNIA DREAMING

Mar 28, 2015 03:33 AM
Jason E. Gordon
CMG Mortgage, San Diego, CA - Coronado, CA
Sr Loan Officer, CMA, CMPS, CDLP, CDRE, RCSD, CDPE

Thank you Vegas Bob...much appreciated. I am always happy to help contribute to your group!

Mar 28, 2015 04:25 AM
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
CEO of Vision Drive Realty - Coastal San Diego

Great info Jason E. Gordon this answers a lot of the "how come" and "why" of closing costs.

Jul 10, 2017 03:16 PM
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

Jason E. Gordon I must confess that even I came away upon reading this post from you with the acquisition of several good bits of information. I have therefore <Bookmarked> it for future reference. Thank You!

Jul 11, 2017 05:09 AM
Jason E. Gordon
CMG Mortgage, San Diego, CA - Coronado, CA
Sr Loan Officer, CMA, CMPS, CDLP, CDRE, RCSD, CDPE

Thank you for your thoughtul comments Sandy Padula and Norm Padula, JD, GRI NMLS#1483386 ...much appreciated. If each AR Member uses our ability to provide factual data online, we will help consumers (and professionals) make better decisions with regards to real estate & mortgage related issues. We are geographically just a few miles from each other. Please do not hesitate to contact me if/when I can be of assistance to you and/or your valued clients. Either way, wishing you both the best in your business endeavors!  

Jul 11, 2017 11:30 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good morning Jason E. Gordon ,

I was glad to see your post featured in Carol Williams "Second Chance Saturday" series. You are right "If each AR Member uses our ability to provide factual data online, we will help consumers (and professionals) make better decisions with regards to real estate & mortgage related issues." So true!!

Jul 29, 2017 05:55 AM
Jason E. Gordon

Thank you very much Dorie, much appreciated. We AR Members have a unique opportunity to fill these online SEO searches with factual data, and I'm happy to help make it happen!

Jul 31, 2017 07:53 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

This is a terrific post, Jason, with so much valuable information on a topic that is often confusing for new homeowners.

Jeff

Jul 29, 2017 09:45 PM
Jason E. Gordon

Your comments are always appreciated Jeff...thank you!

Jul 31, 2017 07:54 AM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Jason E. Gordon  Great information here great to see it has been Featured by two both Robert Vegas Bob Swetz  and Carol Williams 

Jul 31, 2017 09:35 PM
Raymond Denton
Homesmart / Evergreen Realty - Irvine, CA
Irvine Realtor®

Another high quality explanation, Jason.

Nov 14, 2020 01:17 PM