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Are People Who Own Condos Required to Pay Property Taxes?

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Property taxes are assessed on real estate and real property. It’s a common misconception that condo owners don’t pay property taxes because they don’t own the land on which the buildings sit or the buildings themselves, but condo owners do own their individual units. In California, condominiums are considered real property, so they’re subject to property taxes. Here’s what potential buyers and current owners of condos in downtown San Diego should know about property taxes.

How Condo Property Taxes Are Calculated

Property taxes are always based on the home’s appraised value, whether it’s a single-family home, a townhome, or a condo. In San Diego, property tax rates are typically between 1.02 and 1.19 percent, which includes a 1 percent base rate plus voter-approved bonds. Under California law, property taxes can’t increase more than 2 percent each year.

Your total property tax bill will be a combination of your property’s assessed value multiplied by your local tax rate plus any special assessments in your area, which means tax rates vary across the county, at least slightly. Some communities in San Diego, such as Eastlake and San Elijo Hills, have special assessments (called Mello-Roos) that increase property taxes.

Property Taxes Aren’t Included in Condo Fees

Condo fees cover a wide range of expenses related to amenities and the maintenance and repair of common areas, such as roofs, hallways, and landscaping. While condo fees cover landscaping costs, general maintenance, repair work, and emergencies, they don’t include property taxes. The HOA is responsible for covering common areas of the building, but property taxes are assessed on individually owned units. Common areas may be assessed separately, and in those cases, taxes are paid separately by the HOA.

Property Taxes for Condos May Be Lower than Taxes on Houses

Condos, townhomes, and single-family homes all have the same property tax rate. The square footage doesn’t affect the property taxes you pay. Still, condos usually have lower property taxes than single-family homes for one reason only: condos are more affordable than single-family homes in most areas of San Diego.

Taxes for common areas and the land are generally shared among all owners in a condo building, which leaves owners with smaller individual property tax bills. Condos in high-cost areas with many amenities usually have higher property taxes than older and more affordable condos.

Don’t Forget to Consider Property Taxes

Buying a condo means enjoying an almost maintenance-free lifestyle, but condos do come with their share of regular expenses to consider. Remember that condo fees aren’t the only expenses you’ll have in addition to your mortgage payment, condo insurance, and occasional special assessments. You’ll also be responsible for paying property taxes twice a year. To estimate your property taxes, use the sales price for your condo and check if the property is in a special Mello-Roos district that makes additional assessments.

It’s smart to find out the amount you’ll pay in property taxes as you calculate how much you can afford when you’re looking to buy real estate in downtown San Diego. Another intelligent move is choosing to work with real estate professionals who know the ins and outs of the real estate market in the area. The experts at 92101 Urban Living have years of experience helping clients with reliable, straightforward advice about buying and selling properties in downtown San Diego. Call one of our friendly agents today at 619-649-0368.