You’ve just—or are just about to—purchase a house.
Congratulations! It’s a big deal.
And yes, you may know about closing costs and other upfront fees, but you may not know that the government takes an ongoing cut—your annual San Diego property tax.
That’s right, it’s time to delve into this important-but-not-often discussed property tax— the worst part of playing Monopoly outside of your family and friends moving past you while you’re in jail.
According to the San Diego County Treasurer-Tax Collector, the office collects more than $6 billion in County, city, school and special district taxes.
And, of course, you’re not an exception to that number.
The taxes, referred to as secured property taxes, you pay on your house go back into the state and local community—think schools, libraries and redevelopment projects.
The office also collects $150 million in unsecured personal property taxes on business property, boats, and airplanes, but we won’t get into that here.
So, what exactly do you need to know about property tax in San Diego? Read on to find out all you need to know to stay in good standing, avoid defaulting and dodge the worst—losing your house to a property auction.
Property Tax is Your Responsibility
Similar to your annual income tax return, your property tax isn’t consolidated and sent to you by the government—it’s your responsibility to track down your property tax invoice and pay.
This also means—because property tax is tied to the property and not the property owner—you may be responsible for any property taxes the previous owner didn’t pay. Oh, boy.
As stated by the San Diego County Treasurer-Tax Collector, "Under California law, it is the responsibility of the taxpayer to obtain all tax bill(s) and to make timely payments."
This means there are legal repercussions if you don’t pay.
And of course, the tax collector office only notifies you when your property goes into default and calculates late payment penalties—but you’re on your own before it gets to this point.
And make sure your payment is correct or you and the previous owner have accurately divided up the payments as the Treasurer-Tax Collector cannot adjust the taxes once filed.
Remember, you have to pay property tax for all properties you own. If you only own one parcel, this is pretty straightforward, but for all of you real estate mavens, be sure to keep a list of all of your parcel numbers at the ready when it comes tax time.
Property Tax Payments Differ From Federal Income Taxes
Don’t be confused about property tax versus personal tax deadlines and calculations.
Since we’ve all been programmed to associate April 15 with tax day and the standard income tax deductions, it’s easy to assume that’s the deadline for all tax documents and the way all taxes are calculated.
But that’s not the case.
When it comes to property taxes, the first installment is actually due November 1 with delinquency after December 10.
The second installment is due February 1 with a delinquency after April 10, five days earlier than the federal income tax due date just to mess with you.
They’re also calculated differently. The formula for your property tax in San Diego is:
1% cash value of the property of your property (and the value can’t increase more than 2% annually) + voter-approved bonds in your area + fixed-charge special assessments (including Mello-Roos, specially-taxed areas like Community Facility Districts) = Your Property Tax
The important bit is remembering not to conflate how income and property taxes are handled. Consulting with a professional is always a good way to go, especially if you want to make sure you’re aware of and understand all bonds and special assessments baked into your property tax.
Late Property Tax Payments Incur Penalties—and More Dire Consequences
Much like late library books, delinquent bills and other “should’ve been paid but haven’t yet for whatever reason” items, late property tax payments mean late fees.
Considering you have over a month buffer for each of your payments, you should be able to set a reminder (or several) and get them in on time, but here are the added charges if you don’t:
- After December 10th, a 10% penalty
- After April 10th, a 10% penalty plus a $10 charge
On top of this, when the fiscal year ends on June 30, a $33 redemption fee and a 1.5% per month, or 18% per year, penalty is added to your total due. Talk about adding insult to injury.
Earlier, we teased those legal repercussions, so let’s dive into them now. If you move from merely late to chronically missing, then your account goes into default and accrued penalties are calculated.
Installment plans are available to help climb out of this situation, but it’s not something you can ignore. But that’s not the biggest repercussion.
If worse comes to worst and you’ve been in default for five or more years, the San Diego County Treasurer-Tax Collector holds an annual online property tax sale auction to sell off any of these properties on their tax roll. Yikes.
If you have any further questions, be sure to check out the San Diego Auditor and Controller’s FAQ page about property tax.
The Treasurer-Tax Collector recommends paying your property taxes via their online payment system, but if you’re a die-hard snail mail acolyte, you can always mail them into the office.
Just be sure the envelope is postmarked by the U.S. Postal Service on or before December 10 and April 10.
Don’t let San Diego property tax get you down—stay on top of it and chalk it up as a necessary cost to live in the sunshine.
Sound overwhelming? We can help.
The Cassity Team is a group of all-things-real-estate experts. From how to prepare your home to sell, to what you need to think about as a new homeowner (like home upgrades and property taxes), we've got you covered. Call or text us at 619-800-6178 with any questions for our team, or fill out the form below for more real estate education.
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