What Is A Supplemental Tax Bill In San Mateo County

What Is A Supplemental Tax Bill In San Mateo County

                                          Supplemental Tax Bill In San Mateo County...What Is It?Image title

One of the most common questions I receive from a buyer who just purchased a new home in the recent years is "Danny, why do I have two tax bills?"  It is called a supplemental tax bill.  Done when a home changes owners or a brand new home is built.

Technically, it would be a separate bill for the first year of ownership but it is not an additional levy of taxes on your property.  By definition per San Mateo county assessor website:  

"Supplemental" taxes are additional secured taxes that are due when property undergoes a change in ownership or new construction. The additional tax is owed because the County Assessor is required to immediately adjust the January 1 value to reflect the new value of the property (see Secured Tax definition). The supplemental tax bill represents the tax due on the difference between the old and new values adjusted for the number of months left in the fiscal year.

In short, it is the difference of the seller's lower tax amount and the new buyer's tax amount.  Example:  If the seller had a home assessed value of $800,000 and the new buyer's adjusted assessed value is $1,200,000, then the county will send you a bill for the $400,000 assessed difference (broken into two payments).  It varies on when the home closes.  This is especially true in an escalating market.  The county is just "catching" you up on the taxes you owe for your home.  (Danny D is not a tax professional, please confirm with your trusted tax professional)  *Supplemental Tax Bills are not paid in escrow and are not impounded by your mortgage lender.                                 

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How much are property taxes?  A good way to estimate is to add 1.25% of the home's purchase price.  The county assessor has a formula to arrive at the assessed value but it is much easier to use this method which includes the county bonds.  (again, please confirm and discuss with your tax professional)

If you are currently purchasing a home in 2017, you can use this link which takes you too a supplemental tax calculator.  As a local broker, I have advised all my buyer's of this future payment and that they should save accordingly for the payments.  Here is the useful link to help you figure out your supplemental taxes

Supplemental tax estimator - https://propertyid.com/tax-estimator#/

Happy Buying!

Danny D - Your Local Coastside Real Estate Partner

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Phone: 650-400-7670
Dated: February 9th 2017
Views: 4,306
About Danny: Danny D of Element Real Estate approaches every one of his goals with a forward-thinking attitude an...

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