A Guide for Buyers & Sellers to Blossom Valley Property Taxes

Understanding Blossom Valley Property Taxes

Understanding Blossom Valley Property TaxesCalifornia property taxes are, in simple terms, a beast. Both buyers and sellers in California experience some confusion about who pays how much in property taxes and when. The tax assessor's office works 4-6 months ahead to be able to process everyone's real estate, there is some lag time in updating the rolls. In the guide below, explore the breakdown of the top questions, while working through example scenarios to help both buyers and sellers understand their property tax responsibility.

When Are Property Taxes Due in California?

California property taxes are paid in two installments:

  1. The first installment is due November 1 and is considered delinquent if not paid by December 10.
  2. The second tax installment is due February 1 and is considered delinquent if not paid by April 10.

Who is Responsible for Property Taxes?

Whoever owns the property on January 1 of the current calendar year, by California law, is responsible for taxes up until the close of the escrow date. Once the close of escrow is complete, the new owner is responsible for that year's property taxes at a prorated amount.

What Your First Property Tax Bill on Your New Home Might Look Like

You buy a home and pay the taxes upon closing, the property taxes you pay at closing will be based on the seller's property tax amount since the property tax roll does not immediately get updated. The tax assessor's office can take 4-6 months before they update the property tax records to reflect the new owner's name and assess the taxes based on what the purchase price was. Once the county updates the property tax roll, they will send the new owner a supplemental tax bill to cover the difference in taxes between what was paid through escrow and what the new property tax bill is.

Until the tax roll is updated, there can be some common confusion. The California property tax bill will either be addressed to the previous homeowner or it will get forwarded to the previous owner's new address so the buyer never sees the bill. Even so, you as the buyer are responsible for logging on to the county tax assessor's website to pay the property taxes.

Defer from getting comfortable with the first-year tax bill. It will not be an accurate tax rate going forward. California property taxes are based on the original sale price of the home. They increase no more than 2% year over year. Your first-year property tax bill on your house will be based on what the seller originally bought the house for, and not what you bought it for.

Understanding Blossom Valley Property TaxesThe tax bill will be based on a lesser sale price, and it will also be prorated to the day you close on the home. Then the next year, the county updates the roll with the new purchase price. They give you a supplemental tax bill to cover the difference.

Do I Have to Pay Property Taxes if I am Selling my House?

For sellers in California, you are responsible for having to pay the property taxes up until the close of escrow. Even if that close falls very close to the installment due date.

Example 

If you are selling your home for $1 million with an escrow close date of February 20, the following will take place:

  • The seller pays 100% of the February 1 installment.
  • The seller pays 20 days of the prorated tax rate for the next installment.

Understanding California Proposition 19

As a San Jose Realtor, I explain this to several home buyers and sellers: "California Proposition 19 is also known as the Home Protection for Seniors, the Severely Disabled, and the Families and Victims of Wildfire or Natural Disasters Act. It is a Constitutional Amendment that imposes new limits on property tax benefits for inherited family property. Under Proposition 19, a child or children may keep the lower property tax base of the parent(s) only if the property is the principal residence of the parent(s) and the child or children make it their principal residence within one year."

The Bottom Line

There are many more questions you might have on escrow, taxes, and the breakdown of responsibility among buyers and sellers. Using this guide as a process to make it as easy as possible, and get you into your dream home. Let your professional Homeowner Experience Real Estate agent guide you in finding your dream home in the many beautiful communities in Blossom Valley today!

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