If you just closed on your new home, you’ve probably got a lot of things on your mind, like home maintenance, homeowners insurance and property taxes. You may have an escrow account (also known as an impound account) with your lender that splits up your taxes and homeowners insurance into monthly payments rather than a lump sum.
You get a supplemental tax bill in the mail. Now what?
A supplemental tax bill is one you get for additional charges not covered by your annual tax bill. Supplemental tax bills are mailed directly to the homeowner and are generally not paid out of the escrow account.
Let’s unpack the way these work, to explain why California homeowners will get supplemental tax bills in the months after closing on their homes.
California Supplemental Tax Bills
Under current California law, after there is a change of ownership to a home, the property is reassessed. The supplemental bill covers the difference between the previously assessed value taxes and the newly assessed value when you purchased the home. Think of it as a catch-up bill.
You may see the supplemental bill within a few months of buying your home. If you buy your home between January 1 and May 31, there’s a good chance you’ll actually get two supplemental tax bills. The first supplemental bill covers the difference between the new base year value of your property and the current year taxable value. The second one covers the difference in the new base value and the taxable value on the roll for the upcoming tax year.
You may also receive a supplemental tax bill for changes that add property value, like adding square footage or special features like a swimming pool or fireplace.
It’s important to note that this bill doesn’t get sent to your mortgage servicer, as they only receive your annual property tax bill.
This is a bill that is separate from what gets paid out of your regular escrow account (if you have one), so it is important to set aside funds specifically to pay this bill.
Like any other bill, supplemental tax bills should be paid by the due date, or you could be charged a delinquency penalty.
Questions About Supplemental Taxes?
You can contact your local taxing authority with any questions you have about your regular tax bill as well as any special assessment.
If you’re looking for updated information on your regular escrow amount – not including special or supplemental assessments, Quicken Loans clients with an escrow account can always view their tax information on the escrow page of their Rocket Account. If you have any questions for us, you can leave them below, and we’ll get you the answer or get you to the right place.
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