SUPPLEMENTAL taxes are levied on property as it exists on the date of the change in ownership or completion of new construction in accordance with Article XIII A of the California Constitution Supplemental taxes represent the additional taxes due for an increase in the assessed value resulting from an ownership change or new construction . If you purchased the property for less than the previously assessed value, you may receive a supplemental tax refund.
When will I receive a Supplemental Tax Bill?
Changes in ownership or new construction will prompt a Supplemental tax bill. Mailings of supplemental bills are only done a few times per year so don’t be concerned if you haven’t received one.
How do Supplemental Tax Bills work?
Supplemental tax bills are prorated from the date of the transfer or completion of new construction to the end of the tax year (June 30). If the supplemental assessment is a positive amount, the County Auditor-Controller will calculate and prorate the supplemental property tax from the date the event occurred, through the end of the fiscal year (June 30). The Tax Collector will mail supplemental tax bill(s) within a few weeks. If the supplemental assessment is a negative amount, a refund may be generated for a portion of the taxes that have already been paid. The County Auditor-Controller will review your payment status, and if you are entitled to a refund, a check will be mailed a few weeks after the tax bills are mailed.
I recently purchased a house and received my property tax bill, but I also received two supplemental tax bills. What's going on?
The first year of owning a new home can be confusing because of the government cycle for assessing property and sending out tax bills. Property tax bills are sent every September or October and are based on the property's assessed value on January 1st of that year. The first installment payment is due no later than December 10th, and the second installment payment is due no later than April 10th.
Supplemental tax bills are sent out separately from the regular bills and cover the difference between the previous owner's assessed value and the new purchase price. Because the County operates on a July-June fiscal year, some people will receive more than one supplemental tax bills depending on when the property was purchased or new construction was completed.
For example, if you bought your house on August 31st for $500,000 and the house was previously assessed for $200,000, the regular tax bill will be based on the previous owner's lower value as of January 1st. The seller should have paid part of the taxes (from July 1 to Aug 31) covering their ownership period up until escrow closed. A supplemental tax bill, usually sent three to six months after the purchase,will cover taxes for the additional $300,000 in value for the current fiscal year.
If you bought your house on May 31st, your tax bill would straddle two fiscal years. You would receive a supplemental tax bill for the pro-rated difference in value between April 1st and June 30th, and a second bill for the period July 1st to June 30th of the following year.
PLEASE NOTE: If your taxes are impounded by your mortgage company, the supplemental taxes are generally not covered and the taxpayer must pay them separately! Please call our office if you have any questions.
This is how secured property taxes are handled under Proposition 13 for the taxes incurred during transitions between sellers and buyers. Property taxes under Prop. 13 are based on 1% of the purchase price of your home. The bills may be higher than 1% due to special assessments in your taxing district for sanitation, water districts, vector control, bond issuances and Mello-Roos charges.
When will I receive my refund check if I received a negative supplemental assessment?
The refunds for negative supplemental assessments are generally mailed within 90 days of the assessment being enrolled by the Office of the Assessor. Regardless of when you physically receive the negative supplemental refund, you are required to pay the full amount of the annual Secured property tax bill, which may be based on the previous assessed value. Failure to pay the property taxes timely will result in delinquent penalties and costs. You can pay up to midnight on the County’s secure website at ocgov.com/octaxbill with no convenience fee by using your bank account. Make sure you get a confirmation number prior to midnight to ensure your payment was processed timely.
Can the Tax Collector use the refund dollars from the negative supplemental assessment towards my secured property tax bill?
Yes, you can mail in the County refund check together with the difference applicable to the second installment. However, it is recommended that you deposit our check and make your payment for the full amount of the second installment. If you enclose your check, you need to include a written request to the Tax Collector authorizing the use of the refund dollars for your tax bill payment. This request and the balance of the funds must be postmarked by the USPS by April 10th to avoid penalties on the secured bill.
My taxes are impounded by Mortgage Company; do I still have to pay these supplemental taxes?
Yes, Supplemental taxes are generally not covered by impound accounts and a copy of the bill is NOT sent to your mortgage lender. Payments not received by the required due dates, either with a USPS postmark or on-line by midnight will accrue late penalties. Consider paying on-line using our eCheck program, which processes the check against your bank account at ocgov.com/octaxbill.
If I have an impound account, will my lender receive the negative supplemental refund check?
No. Any refund generated by the Negative Supplemental Assessment will be made payable to the owner of the property, not the lender.
Why did I receive more than one Supplemental property tax bill?
It is possible to receive more than one Supplemental property tax bill, depending on when the ownership change or new construction occurred and when the Office of the Assessor recorded the new value on the tax roll. Property values are assessed as of January 1 for the upcoming fiscal year (July 1 - June 30). You will receive one Supplemental property tax bill from the date of the change in value through June 30 (end of fiscal year). You may receive an additional Supplemental property tax bill for the change in value from July 1 through June 30 of the following fiscal year.
When do Supplemental property tax bills have to be paid?
The date on which Supplemental property tax bills become delinquent varies depending upon when they are mailed by the Treasurer-Tax Collector. If the bill is mailed between July 1 and October 30, the taxes become delinquent on December 10 for the first installment and on April 10 for the second installment (the same delinquency schedule as for annual tax bills, except where the due date falls on a weekend or legal holiday then it would be due the next business day). If the Supplemental property tax bill is mailed between November 1 and June 30, then the first installment is due the last day of the month following the month in which it was mailed. The second installment is due the last day of the 4th month after the first installment was due. Late penalties and fees are applied for all delinquent Supplemental property tax bills.
What is an Unsecured Supplemental property tax bill?
The term “Unsecured Supplemental” refers to an assessment that is based on prior ownership of Secured property. For example, an Unsecured Supplemental assessment will be issued to a homeowner who owns or inherits a property and re-sells it before the Office of the Assessor has issued a Secured Supplemental property tax bill. Unsecured Supplemental property taxes will have varying due dates based on the issuance of the assessment by the Assessor.
My parcel shows an Unsecured Supplemental tax bill that was due before I owned the property. What do I do?
If you were not the owner of the property during the period of time on the Unsecured Supplemental tax bill, then it is not your responsibility to pay. You will need to disregard it.
Can you remove the Unsecured Supplemental tax bill from my parcel listing on your website?
No. As long as a bill remains unpaid on a property, then it will remain visible on our website until payment is made in full. You will need to disregard any Unsecured Supplemental bill displayed under your parcel if it is due from a previous owner.
I am trying to refinance and my lender is showing a lien on the property for an Unsecured Supplemental bill, but I didn’t own the property when the bill was issued. What do I do?
A tax lien is recorded against the owner of a property for delinquent Unsecured Supplemental bills. The tax lien would not be recorded against the property itself, and therefore should not affect the property from being sold or refinanced
How can I be sure the Unsecured Supplemental bill is not my bill and is not my responsibility to pay?
You are only responsible for Supplemental property taxes that cover the months during which you owned the property. The previous owner should have received a separate Supplemental tax bill to pay. If the tax bill covers a period during which the property was not owned by you, then it is not your responsibility to pay. The assessee or previous owner during that time period is responsible for payment of the Unsecured Supplemental property taxes.
Why wouldn’t escrow have covered the previous owner’s Supplemental bill when the property was sold?
In some cases, a property changes ownership before a Supplemental bill is issued for a prior change of ownership or completion of new construction. This will occur if a property is purchased and then sold within a short period of time. The Supplemental tax bill you receive should cover only those months during which you owned the property, and the previous owner would receive a separate Supplemental tax bill for their pro-rated ownership period. Because of the large number of parcels and property transfers in Orange County, there may be delays in billing for new assessments up to one year from transfer.
What if I purchase a piece of property and then sell it again after a few months?
If you purchase and then sell property within a short period of time at a higher value, you should expect to receive a Supplemental property tax bill that covers only those months during which you owned the property, and the new owner should receive a separate Supplemental property tax bill. However, because of the large number of parcels and frequency of property changing hands in Orange County, there may be delays in re-assessing properties. Be sure to check the dates of ownership on the Supplemental property tax bill to ensure that the period covered is the period during which you actually owned the property. If you receive an incorrect tax bill, you need to contact the Office of the Assessor at (714) 834-2727 and inform them that the assessment needs to be revised to reflect the correct ownership dates.
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