2024 SUMMER NEWSLETTER
The “Supplemental Tax Estimator” is a tool designed to help property owners estimate the “supplemental” property taxes after purchasing a home.
After a property is sold and ownership transfers to a new owner, State law – under Proposition 13 – requires the Assessor’s Office to set a new assessed value for the property based upon its current market value.
This value, called the base year value, should reflect the market value of the property as of the date of transfer. However, it takes time for the Assessor’s Office to analyze the required market data that will determine a property’s fair market value.
By the time the Assessor’s Office values the property for reassessment and updates the pertinent records, property tax bills may already have been calculated based on the prior assessed values. Therefore, supplemental tax bills are issued to catch-up on those taxes. Simply put, a supplemental tax bill reconciles the old assessment with the new assessment.
Provides Estimate
The Supplemental Tax Estimator provides an estimate of the amount of supplemental taxes you can expect to pay if you have recently purchased a property.
Supplemental Tax Bills are Separate
It’s important to also remember that supplemental property tax bills are not paid at the close of escrow when you purchase of a property. Additionally, if you set-up an impound account to pay your mortgage, taxes and insurance, it does not pay supplemental property taxes. They are billed separately. This is important as many homeowners are confused about what is paid through an impound account. For those who mistakenly think that these taxes are paid through the impound account, a hefty 10% penalty may await you!
For more information, visit the Supplemental Tax Estimator page.
July 1: This is the first day of the property tax fiscal year. The fiscal year runs from July 1 to June 30. The Assessor’s Office is in the final stages of closing the 2024 Assessment Roll, which actually closes June 30 and will be highlighted in the next newsletter.
July 2: This is the first day to file an application for a Decline-in-Value review. If you believe that your property value has experienced a decline in market value, you may file an application for a review. A decline occurs when the current market value of your property is less than the current base year value as of January 1 of the calendar year. The filing period is July 2 through November 30.
Some history: California’s Proposition 13 established the base-year-value for property tax assessment purposes. It also caps the growth of a property’s assessed value at no more than two percent a year unless the market value of the property falls below that base-year-value. In 1978, California voters passed Proposition 8, a constitutional amendment that allows a temporary reduction in assessed value when a property suffers such a decline-in-value. For more information and to learn how property value is assessed, please visit the Decline-in-Value page.
IMPORTANT NOTE: A decline in the equity of property does not qualify as a “decline in value.” For example: if the assessed value of your property that you bought in 2010 is $500,000, and by 2023 it has increased to $1 million, and then in 2024 it drops to $750,000, you have not experienced a “decline in value,” but only a decline in equity. The value must drop below $500,000 to qualify for a decline in value.
Also, July 2 is the first day to file an Assessment Appeals application. The Board of Supervisors established the Assessment Appeals Board to sit as the Board of Equalization for Los Angeles County. Acting in a quasi-judicial capacity, the Assessment Appeals Board makes fair and impartial decisions to settle valuation disputes between property owners and the Assessor’s Office. There is a $46 non-refundable filing fee for assessment appeal applications. The fee must be paid when submitting the application.
If paying the fee would cause undue financial hardship, you may request a fee waiver. Waiver forms must be submitted online, in the mail, or in-person along with your application. You can request an application 24 hours a day by calling the Assessment Appeals Board directly through their automated system at (213) 974-1471 or Toll Free within LA County at (888) 807-2111, or visit the Assessment Appeals Board website for more information.
