Mykel Martin Real Estate Agent Rancho Cucamonga, CA (909) 476-9600 Contact Profile
About California Supplemental Property Taxes
My Rancho Cucamonga Home Buyer had a question that I thought I'd share. She wanted to find out what Supplemental Taxes were all about and if her FHA impounds would take care of them?
This is what I shared with my Buyer.
Just Exactly What Are California Supplemental Property Taxes?
California Supplemental Property Taxes are additional secured taxes that are due when a property undergoes a change in ownership or on newly constructed homes. The additional tax is owed because the County Assessor is required to immediately adjust the January 1st value to reflect the new value of the property. Adjusted for the number of months left in the fiscal year, the Supplemental Tax bill represents the tax due on the difference between the old and new values.
Even though California Supplemental Property Taxes are addressed in the Purchase Contract, many Home Buyers still misunderstand this additional tax bill. They do understand the pro-ration of property taxes in Escrow, but this bill is often catches a lot of Home Buyers totally off guard. Even more important, most Buyers are not financially prepared for the California Supplemental Property Tax payment.
Advanced preparation for this California Supplemental Property Tax Bill will help you avoid any unpleasant surprises.
When are the California Supplemental Property Tax Installment Due Dates?
The California Supplemental Property Tax installment due dates and delinquency dates will vary dependent upon the month in which the bill is mailed.
If the Supplemental Tax Bill is mailed within the months of July - October
- the First Installment is delinquent on December 10th of the same year the Second Installment is delinquent on April 10th of the next year.
If the Supplemental Tax Bill is mailed within the months of November - June
- the First Installment is delinquent on the last day of the month following the month in which the bill is mailed. the Second Installment is delinquent on the last day of the 4th calendar month following the date the first installment is delinquent.
Generally, the Supplemental Tax Bill usually arrives 90 to 120 days following the close of Escrow. The home owner can pay the bill in 2 installments usually about 120 days apart.
What if My Loan is impounded?
Buyer confusion results from the fact that most homebuyer's believe that the property Tax situation was addressed in Escrow with the Property tax pro-rations. And what can cause even more confusion is when a borrower has their loan "impounded."
Impounded means that the Buyer's taxes and homeowner's insurance are paid with their monthly mortgage payment. All FHA and VA loans and most conventional loans with less than a 20% down are impounded. Borrowers with impounded loans are more apt to ignore the California Supplemental Property Tax Bill. They tend to mistakenly believe that the bill is taken care of with their monthly mortgage payment. This oversight often results in the bill being ignored, discarded and going unpaid. The Buyer eventually finds themselves owing delinquent taxes plus late fees and penalties.
Unfortunately, estimated Supplemental Taxes are not included in the impound calculation. However, if the Buyer does not have the funds available, the Supplemental Property Tax Bill may be sent to the lender for payment. This will result in an adjustment to the amount of your monthly impound account payment in order to reimburse the lender for advancing this unanticipated expense.
If you are not impounded, the Supplemental Property Tax Bill is the homeowner's responsibility and the bill needs to be paid within the time limits to avoid any delinquency and penalties.
If you still have questions, the Tax Assessor's office can provide information regarding how to figure the estimated California Supplemental Property Taxes on your specific purchase as well as provide additional valuable information.
It is very important to note that the lender does not automatically receive the supplemental property tax bill. While you may have enough money in your impound account to pay the bill, you must provide the lender with a copy of the bill to be paid timely to avoid late fees and penalties.
By Mykel Martin Real Estate Agent with (909) 476-9600
www.WeLoveRanchoCucamonga.com BRE# 01169000
Posted on November 02, 2012 10:54 PM