Buyer & Seller Series
Property tax payments and the proration of taxes can often be a confusing aspect of real estate transactions in Sacramento. Whether you're a buyer or seller, understanding how property taxes are handled during escrow and beyond is essential. This post aims to demystify the process and provide you with a clear understanding of how it all works.
Understanding Property Tax Installment Periods in Sacramento
In Sacramento, the annual property tax bill is based on the fiscal year, covering the period from July 1st through June 30th of the subsequent year. While the tax bill is divided into two equal payments called installments, only one bill is typically issued each year, usually in early October. To gain clarity on debits and credits that you'll encounter on your closing statement, it's crucial to be aware of due dates and tax installment periods.
Here are the key dates for each installment:
Prorating Property Taxes in Sacramento
Property taxes in Sacramento are prorated during escrow based on the closing date. The tax payment status and installment period at the close of escrow determine whether the buyer or seller receives a credit or debit for the portion of the tax bill that is not their responsibility.
Taxes for the Seller:
Taxes for the Buyer:
Important Information About the Current Tax Bill
The annual tax bill is issued only once per year, even though it covers two separate installments. In most cases, escrow pays only the installment period relevant to the close of escrow, unless otherwise required by the lender. It's crucial to note that the buyer will not receive an updated bill after closing. Once the bill is issued in the seller's name, it will not be reissued or sent to the buyer. Any tax bills due after the close of escrow, even if they reflect the seller's name, are the buyer's responsibility. Buyers can access their tax bill information through the San Mateo County Tax Collector website using the Assessor's Parcel Number (APN) or property address.
Supplemental Tax Bills in Sacramento
Supplemental tax bills in Sacramento are issued when certain events trigger a reassessment of property taxes. Buyers will receive a supplemental bill based on the new valuation of the property, which is assessed according to the new sales price. These bills are issued several months after the close of escrow and will reflect different due dates and delinquent dates from regular tax bills. Be prepared to receive a supplemental bill, and remember not to discard it when it arrives.
Title companies provide forms in the closing documents to convey information about tax bills and supplemental bills. Your escrow officer will offer further clarification and explanations as needed, ensuring you have a comprehensive understanding of the process.
For specific questions regarding your closing statement or property taxes, please reach out to your escrow officer or consult with a qualified CPA. Remember, understanding property taxes is crucial for a smooth real estate transaction in Sacramento.
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