Real Estate

10 frequently asked questions about California property taxes

We only own property to the extent that we can pay the legal taxes that apply to it. Here are the ten most common questions you should know the answers to if you own a property or plan to own a property one day.

1. How is property tax calculated in California? Annual property taxes will generally be 1% to 1.25% of the home’s sale price at the time of purchase.

2. Can property taxes go up annually? Unfortunately, the answer is yes. In California, the maximum property tax increase is 2% from the above rate.

3. When do I have to pay property taxes? Property taxes are paid twice a year. One is billed in February and is due by April 10; the other is billed in November and is due no later than December 10

4. What happens to the tax I already paid this year if I sell my house? This is handled in the custody process at closing. If you have already paid taxes for the time past your occupation, the buyer will refund the difference.

5. What is a seized account? If your lender is paying your taxes and insurance as part of your monthly payment and your down payment on the house was less than 20%, they will require you to have what is known as an escrow account.

6. I have a seized account: why do I get a refund some years and an increased payment in others to fund the seized account? Your lender is raising funds for you to pay your taxes and insurance premiums on your behalf. When your taxes or premiums go up or down, they adjust the amount they charge you.

7. Can I just pay all my property taxes in December? Yes, it can, but it may have some tax implications. Check to see if this has a disadvantage in your county.

8. What is Mello-Roos? Mello-Roos is a fund created for builders to borrow to install the necessary infrastructure for a new development: sewers, sidewalks, public lighting, etc. Loans are repaid through property taxes.

9. How do I know if I am buying a ‘Mello-Roos’ house? The seller has a legal obligation to inform you. The tax bill, which is public information, will also include this.

10. How long does Mello-Roos apply to a property? Normally 10 to 20 years.

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