Understanding Supplemental Property Taxes

By Matt Unangst, 23 Jan 16:11

• Law passed in 1983 to raise money for schools
• One-time tax - Paid when buying property or beginning new construction
• Formula used to determine tax amount
• Payable in two installments

In order to raise money for schools, the California state legislature passed the Supplemental Real Property Tax Law in July of 1983. The law is expected to raise over $300 million per year, entirely for schools. Despite being in effect for more than two decades, many people still do not understand the law. This article should give you a basic idea of how the law works.

Supplemental property taxes are charged to anyone buying real property or completing new construction in California. You may not be billed immediately – there is usually a three-week to six month waiting period after the sale is completed or construction begins. Exactly how long you must wait is dependent on your county’s Assessor, Controller/Auditor, and Tax Collecter’s workload at the time. When he/she does have time, the County Assessor will come to appraise your property in order to determine the amount of tax you are to be assessed. You will then have the right to apply for a Homeowner’s Exemption or file an Assessment Appeal.

Following the assessment, the County will calculate how much tax you are to be assessed and mail you a bill for that amount. The bill will tell you how much you must pay and when payment is due. Supplemental property taxes are based on a statewide formula. The amount is prorated by the number of months left in the current tax year, which ends on June 30. The proration amount is based on the first day of the month after you take possession of the property or complete construction. Following is a table of the proration factor by month. (if the effective date is July 1, there is no proration)


Effective date is: Proration Factor
August 1 .92
September 1 .83
October 1 .75
November 1 .67
December 1 .58
January 1 .50
February 1 .42
March 1 .33
April 1 .25
May 1 .17
June 1 .08

Your supplemental taxes are due in two equal installments. There is a regular schedule for payment as follows:

• The first installment for a bill mailed between July and October is due on December 10 of the same year. The second installment must be paid by April 10 of the next year.

• The first installment of a bill mailed between November and June must be paid by the last day of the next month after the month in which the bill is mailed. The second installment must be paid by the end of the fourth calendar month following the month in which the first payment is due.

Failure to pay supplemental property taxes on time will result in a lien upon your property.

Supplemental property taxes are not prorated in escrow. They are a one-time tax for which the property owner is entirely responsible.

KEYWORDS: supplemental property tax, lien, escrow, property tax, county assessor, 1983

Tags: supplemental property tax