Tax Closing Costs

Property Taxes
This is the one closing cost that is often prorated between the buyer and seller. If the seller has already paid the annual property taxes, the buyer typically reimburses the seller for the period in which the buyer will be occupying the property. Likewise, if the taxes have not yet been paid, the seller typically reimburses the buyer for the period in which the buyer occupied the property.

Transfer Taxes and Recording Fees
This is the cost for transferring ownership of the property and recording the purchase documents. The fee is often calculated as a percentage of the sales price.

Supplemental Real Property Taxes

The Supplemental Real Property Tax Law was signed by the Governor of California in July of 1983 and is part of an ambitious drive to aid California's schools.

There are certain events that will cause a reassessment of property taxes. The most common are the transfers of ownership and issuing new building permits. Your lender's impound account does not provide for additional supplemental taxes as they are not pro-rated in escrow, unless there is an unpaid supplemental bill outstanding at the time escrow closes.

Once you have closed escrow on your property, the assesor may appraise the property. You can be billed in as few as three weeks or it could take more than six months. Timing will depend on the individual county workload of the County Assessor, the County Controller/Auditor and the County Tax Collector. At that time, you will have the opportunity to discuss your valuation, apply for a Homeowner's Exemption, and be informed of your right to file an Assessment Appeal which disputes the new tax valuation.