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What You need to Know about Supplemental Property Taxes

By LeslieLunde in Downtown San Diego Real Estate with 0 Comments

Financing for Downtown Lofts is Important in 2014

Buying a Downtown Loft or Condo means being well prepared and well informed.   Knowing the details of your purchase and all of the “hidden charges” can make all the difference in calculating the overall purchase price. When buying “new construction”, one of the most overlooked expenses of a Downtown Loft or Condo are the Supplemental property Taxes.   Supplemental Property Taxes represent the difference between the “old” tax basis (based on the developers original cost), and the “new” tax basis (based on the current purchase price).

The Supplemental Real Property Tax Law was signed by the Governor in July of 1983 and is part of an ambitious drive to aid California’s schools. This property tax revision is expected to produce over $300 million per year in revenue for schools.
If you plan on buying new property or undertaking new construction, this property tax will affect you. You will be required to pay a supplemental property tax which will become a lien against your property as of the date of ownership change or the date of completion of new construction.
The assessor will appraise your property and advise you of the new supplemental assessment amount (when will depend on the individual county and the work load of the County Assessor, the County Controller/Auditor and County Tax Collector – could take 3 weeks up to over 6 months). The supplemental tax bill will identify, among other things, the amount of the supplemental tax and the date on which the taxes will become delinquent.
Supplemental tax is a one-time tax which dates from the date you take ownership of your property or complete the construction until the end of the tax year on June 30. The supplemental tax becomes effective on the first day of the month following the month in which the change of ownership or completion of new construction actually occurred. There is a formula used to determine your tax bill. The total supplemental assessment will be prorated based on the number of months remaining until the end of the tax year, June 30.

If Effective Date: Proration Factor Is:
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
July 1 .00

The taxes are payable in two installments, due on the date the bill is mailed and are delinquent on specified dates depending on the month the bill is mailed:
1) If July through October, the first installment will become delinquent on December 10 of the next year.
2) If November through June, the first installment will become delinquent on the last day of the month following the month in which the bill is mailed. The second installment will become delinquent on the last day of the fourth calendar month following the date the first installment is delinquent.

92101 Urban Living is a Downtown San Diego Real estate company specialized in the sale of Lofts and Condos in Downtown San Diego.   Please feel free to Contact Us should we be able to be of service in the sale or purchase of a Downtown San Diego Loft or Condo. ')}