Understanding the supplemental tax

Question: Dear Kari, I bought a home five months ago. A few weeks after I closed escrow on my home, I received a supplemental real property tax bill just like the title company told me and I paid it. Now, two months later, I have received another supplemental real property tax bill. I would like to know, is this a mistake? Answer: Thank you for your good question. The supplemental real property tax only takes place when folks are initiating new construction or buying property. Once the construction or purchase is complete, the new owner will receive the supplemental property taxes bill that will then become a lien against the property. The supplemental taxes are assessed due to the change in ownership, and the bill is not created until the property has been transferred into the new owner's name. The tax is typically not paid in the escrow account because the bill is not created until the escrow is closed. The exception to the rule is that an unpaid previously outstanding supplemental bill exists at the time the current escrow closes. It is the new owner's responsibility to pay these supplemental bills directly to the Tax Collector in addition to the regular annual tax bills. In the event you have a loan on your property and you have elected to have your regular taxes in a tax impound account this supplement bill will usually not be included. Once a buyer has closed escrow on a property, the assessor may appraise the property to determine the new base year value as of the date of the change of ownership or completion of new construction. The Assessor then calculates the difference between the new base year value and the existing roll value. The result is the new supplemental assessment. The Assessor will send you a "Notice of Supplemental Assessment and Impending Tax Bill." This reassessment usually results in an increase in property value, in which case your supplemental taxes will be calculated by the Auditor-Controller based on the change in value and one or possibly two supplemental tax bills will be created and mailed to you by the Tax Collector. However, in some instances, the reassessment can result in a reduction in value, in which case a refund will be prepared by the Auditor-Controller and mailed to you. A reduction in value will not reduce the amount due on the existing annual tax bill. The annual tax bill must be paid in the amount originally billed. The new owner can be billed in a few weeks, or it can take more than six months. The timing that the bill will be mailed to you depends upon the individual county's present workload. If you disagree with the new base year value that was determined by the assessor, you should contact the assessor's office, and you may choose to appeal your assessment. It would be wise to pay your bills even if you do not agree with the amount; otherwise, you may incur penalties for late payments. If your value is subsequently reduced, a refund will be issued to you. You are taxed only on that portion of the year for which you have ownership or completed construction. It is possible to receive two supplemental bills, depending on the timing of the year. You will receive one supplemental bill if the date of the change in ownership or the completion of new construction is between June 1 and Dec. 31 inclusive. You will receive two supplemental bills if the date of the change in ownership or completion of new construction is between Jan. 1 and May 31 inclusive. The same rules apply for unpaid annual tax bills. If your supplemental tax bill is not paid by June 30 after the second installment is delinquent, the property becomes tax-defaulted (even if you have paid your annual tax bill). After five years of delinquency, the property will be subject to the tax collector's power of sale and may be sold at a tax sale. This information is deemed to be accurate and only for the use of this question.