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Your tax rate varies based on the location of your property. A tax rate includes a general 1% tax levy applicable to all property tax bills, voter approved (pre-Proposition 13) special taxes, and voter approved debt issues for your particular area. The general tax levy is based on state law and is limited to 1% of assessed value (or $1 per $100 of assessed value). The tax rates for voter approved debt are computed each year based on the amount needed to pay principal and interest on the debt. Special tax rates are normally determined on a specific formula or can be approved at a fixed rate for a specified duration.
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* If delinquent date falls on a weekend or holiday, the delinquent date is the next business day.
Your property tax bill consists of three separate categories of levies: General Tax Levy, Voter Approved Indebtedness, and Direct/Special Assessments. That portion of the bill labeled General Tax Levy is the only amount controlled by Proposition 13. This tax is limited to a maximum of 1% of the assessed value of your property (the “land” and “improvements”), and can be no more than 2% greater than the previous year’s tax bill.
The portion labeled Voter Approved Indebtedness includes taxes levied to repay bonds approved by the voters. This amount varies greatly from county to county depending upon the number of local bond issues approved. Under current law, local general obligation bonds require a two-thirds majority vote to pass.
The portion of the bill labeled Direct/Special Assessments is now controlled by Proposition 218. Assessments now require a majority “YES” vote of the property owners, with each owner voting the dollar amount of their assessment. Fees charged for the property related services of sewer, water, and refuse collection can be imposed without a vote, but may not be greater than the cost of providing the service.
If you feel the Assessor’s valuation is incorrect you should first call the County Assessor’s Office and discuss your valuation with an appraiser. If you cannot reach an agreement with them, your next step is to file an appeal with the Assessment Appeals Board in your county. You will find their phone number listed in the County Government section of your local telephone directory. Please be aware that there is a limited window of opportunity to file an appeal; be sure you meet the deadlines.
Special taxes and assessments such as Mello-Roos Districts are secured by a lien against your property. Until the bonds issued by the district are paid off, whoever owns the property must pay for this debt. This means that buying a home in a Mello-Roos or Assessment District is like buying a home with another mortgage already attached to it. Wary buyers know to consider a home’s tax burden when determining the total cost of the home, and for Mello-Roos districts, sellers are now legally required to provide the buyer with a Notice of Special Tax. However, it is important to note that no disclosure requirement currently exists for Assessment Districts, which place a similar lien and debt burden against your home.
Mello-Roos is a form of financing that can be used by cities, counties, and special districts (such as school disricts). Mello-Roos Community Facilities Districts (CFDs) raise money through special taxes that must be approved by 2/3rds of the voters within the district. A CFD is formed to finance major improvements and services within the district which might include:
The taxes are secured by a continuing lien and are levied annually against property within the district.
Bonds issued by a Mello-Roos district constitute a lien against your property. If you fail to pay a Mello-Roos special tax, the district may foreclose on your home and use a portion of the proceeds to collect the unpaid amounts. It is important to know that accelerated foreclosure laws apply to Mello-Roos districts, which means that a district can initiate foreclosure 150 to 180 days after your payment is overdue.
If your property is part of a Mello-Roos District (Community Facilities District), a 1915 Act Assessment District, or certain other special financing districts, your home is most likely subject to accelerated foreclosure. While the County must wait for five years to foreclose on a property because of delinquent taxes, Mello-Roos and Assessment districts can begin foreclosure proceedings 150 to 180 days after one of their tax charges becomes delinquent.
Since July of 1990, California Civil Code Section 1102.6 has required that sellers make a good faith effort to give property buyers a “Notice of Special Tax” if the property is in a Mello-Roos district. The notice must include the current year’s maximum special tax for the parcel, the rate at which that maximum tax may increase per year, and the final date in which special taxes may be collected for bonded indebtedness. Property sold “as is” is not exempt from providing this disclosure, as stated in Section 1102.1 of the California Civil Code.
1915 Act bonds are commonly issued by an assessment district to raise money needed to build infrastructure (sewer trunkline, utility line, roads, etc.). The properties that directly benefit from the improvements are then assessed an annual amount on the property tax bill. Normally this will be listed as an Assessment District or Assessment Bond line item on your tax bill. It is important to note that the assessments are secured by a lien on your property, and the district has the right of accelerated foreclosure if assessments are not paid when due.
If you are having difficulty paying your property taxes, you may qualify for the State’s property tax postponement or property tax assistance programs for people who are blind, disabled, or 62 years of age or older. If your annual income is $24,000 or less, you may have the option of having the State pay all or part of your property taxes. This deferred payment is a lien on the property and becomes due upon sale, change of residence or death. For more information on property tax postponement, call the State Controller’s Office at 800-952-5661.
If your total annual household income is $12,000 or less, you may qualify for property tax assistance, whereby the State provides a cash reimbursement to pay for your property taxes. Filing for the program will not reduce the amount of taxes owed, nor will it result in a lien being placed on your property. For more information on property tax assistance, call the State Franchise Tax Board at 800-852-5711.
The most common type of exemption is the Homeowner’s Exemption for an owner-occupied residence. Homeowners who own and occupy a dwelling on January 1st as their principal place of residence are eligible to receive a reduction of up to $7,000 of the dwelling’s full cash value. The law provides that once you file a homeowner’s exemption claim and receive the exemption it is not necessary to file each year as long as you continue to own and occupy the residence on which the exemption is claimed. “Dwelling” means a building, structure or other shelter (including boats) constituting a place of abode, whether real or personal property.
Article XIII-A of the California Constitution (Proposition 13) requires that real property be reappraised whenever a change in ownership occurs. When a transfer occurs, the Assessor receives a copy of the deed and an appraisal is made to determine the new market value of the property. The property owner is then notified of the new assessment, and has the right to appeal the value if he does not agree with it.
The amount of the supplemental assessment is the difference between the prior assessed value and the new assessment on the property. This value is pro rated, based on the number of months remaining in the fiscal year. Thereafter the new owner pays the full tax based on the new assessed value. The previous owner is liable for the tax due up to the date of sale; the new owner is responsible for the tax after the date of sale.
If your taxes are paid through an impound account, your lender will receive your annual tax bill and you will receive an information copy. Supplemental tax bills, however, are not sent to your lender. They are mailed directly to you. It is your responsibility to contact your lender to determine who will pay the supplemental tax bill.
If you do not pay the first installment of your annual tax bill at the Treasurer-Tax Collector’s Office by 5 p.m. on December 10* or payment is not postmarked by that date, then the taxes become delinquent and a 10% delinquent penalty is added to any unpaid balance. If you fail to pay the second installment by 5 p.m. on April 10,* or payment is not postmarked by that date, it becomes delinquent and a 10% penalty plus a charge of $10 is added to the unpaid balance. If you fail to pay either or both installments at the Treasurer-Tax Collector’s Office by 5 p.m. on June 30,** or payment is not postmarked by that date, then the property becomes tax defaulted and additional penalties and costs accrue.
If your property is part of a Mello-Roos or Assessment District, your property may be subject to an accelerated foreclosure lien. This can result in additional interest, penalties, collection costs and legal fees if you don’t pay your tax bill on time. If your property is in one of these special financing districts, you should make every effort to pay your bill on time. Or, you should contact the District and attempt to pay that portion of your bill separately to avoid any accelerated foreclosure action.