What California Homeowners Should Know About Supplemental Tax Bills

If you just closed on your new home, you’ve probably got a lot of things on your mind, like home maintenance, homeowners insurance and property taxes. Most of you have something called an escrow account (also known as impound account) that splits up your taxes and homeowners insurance into more manageable monthly payments rather than a lump sum.

You get a supplemental tax bill for your house. Now what?

A special assessment like this is one you get for additional charges not covered by your normal taxes. There are a few reasons you might get these charges, but you might be surprised to see a bill so soon after you’ve moved in. This post will unpack the way these work to explain why some California homeowners get supplemental tax bills in the months after closing on their home.

When Would You Get a Special Tax Assessment?

Although your escrow account covers 90% of tax situations, there are one-off times that you might receive a supplemental tax bill. There could be any number of reasons for this, including one-time special tax assessments for changes that add property value, like adding square footage or special features like a swimming pool or fireplace.

One state that has some special requirements is California. The way California assesses property taxes is deserving of some special attention.

California Supplemental Tax Bills

Under current California law, homes within the state are reassessed for tax purposes annually, but for most property, the assessment is just the previous year’s value adjusted for inflation up to a 2% increase annually.

The timing of the bill depends on the timing of the assessment. This’ll take place within the first year of an ownership change, and you may see the bill within a few months of buying your home.

The supplemental bill covers the difference between the previous assessed value taxes and the new assessed value when you purchased the home. Think of it as a catch-up bill.

It’s important to note that this bill doesn’t get sent to your servicer, as they only receive your annual property tax bill.

This is a payment that will be separate from your regular escrow account, so it’s important to know that this might come up and set aside funds in advance on your own.

It’s also important that this bill is paid by the due date, or you could be charged a penalty.

Questions About Supplemental Taxes?

You can contact your local taxing authority with any questions you have about your regular tax bill as well as any special assessment.

Quicken Loans clients can always view their tax information on the escrow page of their Rocket Mortgage Servicing account. If you have any questions for us, you can leave them below, and we’ll get you the answer or get you to the right place.

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