If you are buying a home in California, you need to know how much you will pay in taxes each year. It’s important to be prepared for the expense of real estate taxes. Here are some things to consider before purchasing a home.
CALIFORNIA REAL ESTATE TAXES FAQ:
- How are California real estate taxes calculated?
- How often do taxes change in California?
- What should I know about California Real Estate taxes before purchasing a home?
- What are the local tax websites in California?
California Real Estate Taxes are based off of the assessed value of your property.
Assessed value is determined by your county’s assessor’s office. In California, the sale of a property prompts a reassessment. Your new assessed value will be the price you pay for the property.
The assessed value is then multiplied by the local tax rate.
Local tax rate in California is 1% of the assessed value, however the total tax rate can be as high as 1.25%. There are other taxes levied on the property that you might be responsible for paying depending on your property’s location. These taxes pay for voter-approved bonds and other local debts which increase the tax rate beyond 1%.
Mello Roos are special tax assessments levied on some new communities when they need to be connected to the rest of the municipality with streets and utilities. Mello Roos pay for facilities and utilities that are only used by the community, such as water, sewer, utilities, drainage, electricity and infrastructure.
The developers of these communities can sometimes get local financing to pay for the facilities and then spread the cost over the community members using mello roos to pay back the debt.
Each year the assessed value of your home will change, starting from the purchase price. In California, the assessed value cannot increase more than 2% per year.
-If the value of real estate in your area is increasing, the assessed value of your home will increase by 0-2%.
-If the value of real estate in your area is decreasing, the assessors office will notify you of the new lower assessed value of your property.
-If you wish to challenge the assessed value of your property, you should contact the assessment appeals board of your local tax assessor’s office.
1. Check the local tax collector’s website to get a copy of the previous year’s tax bill
2. Use the previous year’s tax bill to determine the implied tax rate for your property
Total Annual Tax Due ÷ Assessed Value = Implied Tax Rate
3. Multiply the implied tax rate by the amount you plan to pay for the property
Implied Tax Rate x Purchase Price = Estimated Annual Taxes
4. The result will be a fair estimate of your annual property taxes for the next tax year
If you are unsure of what county your property is located in, check the City County Cross Reference
DISCLAIMER: CAPropertyFinder.com is not a tax accountant. You should consult your accountant or your local tax collector for additional information regarding the calculation and payment of real estate taxes in your area.
Thank you for reading our Guide to California Real Estate Taxes brought to you by CAPropertyFinder.com. This is a free report written to help simplify the real estate tax assessment process for California home buyers.
We will continue to add to and improve this guide based on your feedback. Please e-mail or call us at 1-800-287-1808 with questions, comments, or suggestions.
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