YOU HAVE QUESTIONS, WE HAVE ANSWERS!
VIVA ESCROW Q & A SEGMENT
(Real questions sent to us – verbatim!)
QUESTION:
Can you please share with me about how the process works with a county assessor coming out to reassess the property’s value based on the purchase price? My property is in Los Angeles.
How are supplement tax bills calculated? My purchase price is $850,000 and I will close escrow around April 30th.
ANSWER:
Regarding your first question: The County Assessor DOES NOT go out to the property to reassess. When we send the Deed and the Preliminary Change of Ownership form that the Buyer completes to the County Recorder at closing to be recorded, the Assessor will see the sales price of the property on both forms and will do their internal calculations.
Regarding your second question: No matter what the Seller’s present taxes are, you will start paying taxes on your new purchase price from close of escrow. You can calculate the amount that you will pay by multiplying 1.25% to the purchase price then divide it by 365 days. On a purchase of $850,000 your daily property tax amount is $29.11. In other areas of the State of California, the percentage might be higher.
Property taxes run from July 1 of one year to June 30 of the next year. So if your escrow closes on April 30 of this year, your supplement taxes for this year will be from April 30 to June 30. That’s approximately 61 days @ $29.11 per day = $1,775.71. Keep a watch for this bill.
EDUCATIONAL MOMENT:
The yearly taxes come out around October of each year and have to be paid in 2 installments, by Dec. 10 of the first year and April 10 of the next year. Will the new tax amount be reflected in the new bill in October? It should be if there was sufficient time after the Assessor got notification of the sale of the property. If not, the new year’s tax bill that comes out in October will show the Seller assessed tax amount. That bill will still have to be paid by Buyer, even if it has the Seller’s name on it. The Assessor will issue a second bill, which will be the “supplement bill”, for Buyer to cover the difference.
So, death and taxes!
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~ Video of the Month ~
We all need a good laugh. Last month I grumbled about Alexa,
This month it’s Alexa and Microsoft Sam
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~ Quote of the Month ~
Thinking of retiring? Thinking of Arizona? Here’s what they say…
You can retire to Arizona where…
1. You will park three blocks away from your house because you found shade.
2. You can drive for four hours in one direction and never leave town.
3. You have over 100 recipes for Mexican food.
4. You know that “dry heat” is comparable to what hits you in the face when you open your oven door at 500 degrees.
5. The four seasons are: tolerable, hot, really hot, and ARE YOU KIDDING ME??
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My YouTube Offering for the Month
To further educate (and confuse!) here is my video regarding Supplement Taxes.
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You Have Questions? We Have Answers!
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
“Escrow is my FOREMOST language!”
Advance Disclosure:
The opinions expressed in this blog are solely the author’s.
Your comments and viewpoints are always welcome.
Info @ VivaEscrow.com