Determine Property Taxes

This article discusses the technique for gathering information regarding tax rates and the method of calculating the property tax that will be assessed the buyer of a property.

It is assumed that the property is located in California and that the transaction does not involve a Proposition 60 or Proposition 90 transfer of assessed tax base. Although the following example is for a property located in Orange County, the same techniques would apply for any California county. Each county has its own way of making the information discussed in this article available to the pubic and the reader may need to perform a little research to collect the necessary data.

The property for this example was recently listed and sold through the SoCalMLS system. The address is 1723 Miramar Drive in Newport Beach and the listing price of $3,595,000 will be used as an assumed sales price. All information used in this example is easily obtainable from the combination of public records and advertising publications.

Property tax charged to the owner is comprised of two parts.

    The first part is called the ad valorem portion and is computed by multiplying the property base tax assessment value by the ad valorem tax rate. Base tax assessment is the purchase price of the property. Under current California law, the base property tax assessment may increase each year a maximum of 2%.
    The second part is called the special assessments portion. This is the total of the property's portion of special assessment bond and improvement bond payments. This amount is determined by the applicable bonds and is independent of the property base tax assessment.

To collect the data for this example click on the The Orange County Tax Collector property search page link shown at the bottom of this article and enter either the Assessor Parcel Number or the property address and city.

Then click on the appropriate "FIND" button. A page will open displaying the parcel number of the property.

Click on the parcel number link. The page which opens may display several lines with parcel numbers. Click on the parcel number in the line which has the most recent year and does not contain the word "Supplemental".

The page which opens will show information relating to the current tax bill. Look near the bottom right hand corner of the page to locate the words "Click Here for Details" and click on that link.

A page will open which displays a "Tax Rate" column and "SPECIAL ASSESSMENT USER FEES".

The ad valorem tax rate is the sum of all tax rates listed in the "Tax Rate" column and is equal to 1.03956%.

Therefore the ad valorem tax is then 1.03956 x $3,595,000 / 100 which is equal to $37,372.18.

The special assessments portion of the tax bill is the sum of the amounts shown in the "Amount" column below the "Special Assessment User Fees" title and excluding the amount in the "Total" line.

The special assessments portion for this example is equal to $184.56.

The resultant total property tax for this example is equal to $37,372.18 + $184.56 or $37,556.74.

Home Owner's Exemption.

If the home owner has filed for a Home Owner's Exemption, then the property base tax assessment may be reduced by subtracting from it the amount of the Home Owner's Exemption prior to performing the above calculations. At the time of this writing the Home Owner's Exemption is $7,000.

The property tax question has now been answered for ANY property being considered.

Link to -> The Orange County Tax Collector property search page.

By: Allan E. Heller | Orange County coastal Real Estate in Corona del Mar, Laguna Beach, Newport Beach & Newport Coast

Allan Heller represents clients throughout Orange County California, leveraging his extensive experience in all area communities. He places a special emphasis on serving clients in the Newport Coast area. As his valued client, you can expect the utmost level of professionalism and integrity in every transaction. You also will benefit from his strong network of industry contacts and his affiliation with Coastal Orange County's premier real estate brokerage, Coldwell Banker Previews International.

Posted in: Property Taxes