Property Taxes in California

One of the major expenses and obligation of being a homeowner is to pay property taxes! It is helpful and important for property owners to be aware of these due dates and to plan accordingly to avoid late payment penalties.

In California, Property taxes are based on the assessed value of real property, which includes land, buildings, and any improvements. The tax rate is generally set by local governments, such as counties, cities, school districts, and special districts, it can vary depending on the jurisdiction. However, the maximum allowable tax rate is set by state law.

Property taxes are typically due in two installments each year, with specific due dates mandated by state law. The first installment covers taxes for the period from July 1st to December 31st and is due on November 1st. If the payment is not received by December 10th, it is considered delinquent, and a 10% penalty fee will be added.

The second installment covers taxes for the period from January 1st to June 30th and is due on February 1st of the following year. Similar to the first installment, if the payment is not received by April 10th, it is considered delinquent, and a penalty fee will be added.

Property taxes can increase annually based on changes in the assessed value of the property and any voter-approved tax increases. Property owners should review their property tax bills carefully each year to understand any changes and ensure accuracy.

Property taxes in California is protected by Proposition 13, a landmark law passed by voters in 1978. Proposition 13 limits the amount of property tax that can be assessed on any given property to 1% of its assessed value, plus any voter-approved local taxes and assessments. It also restricts annual increases in assessed value to no more than 2% per year, unless there is a change in ownership or new construction.

If you have your property tax impounded, your lender would be responsible to make the payments on your behalf. When a homeowner obtains a mortgage to purchase a property, the lender typically requires the borrower to pay a portion of their annual property taxes each month along with their mortgage payment. Your property taxes would have been broken into 12 monthly payments and included with the monthly mortgage payment. The lender holds these funds in an impound account until the property tax bill is due. When the property tax bill is issued, the lender uses the funds in the impound account to pay the taxes on behalf of the homeowner.

Impounded taxes can provide convenience and peace of mind for homeowners by spreading out the cost of property taxes over the course of the year and ensuring that they are paid in a timely manner. However, it's important for homeowners to understand that impound accounts may also affect their monthly mortgage payment amount, as the lender will adjust the payment to reflect changes in the estimated tax and insurance costs.

If you lost or did not receive your tax bill, can request for a duplicate bill:

https://ttc.lacounty.gov/request-duplicate-bill/

Did you know?

If you own and occupy your home as your primary residence, you are eligible for a California Homeowners’ Exemption of $7,000 reduction from your assessed value. It reduces your property tax bill by about $70 annually.

For more info:

https://assessor.lacounty.gov/homeowners/homeowner-exemption

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