On July 1, 1983, Senate Bill 813 amended the state Revenue and Taxation Code to create what are known as "Supplemental Assessments." This new law changed the manner in which changes in assessed value were billed by requiring that any increase or decrease in taxes due to a change in ownership or completed new construction became effective as of the first day of the month following the date of change in ownership or the date new construction was completed rather than on the next annual tax bill. Supplemental assessments result in tax bills that are "in addition to" (that is, supplemental to) the annual property tax bill sent to each property owner. Changes in ownership or completed new construction that trigger supplemental assessments are referred to as "supplemental events."

Depending on the date of the supplemental event, either one or two supplemental tax bills will be produced. Supplemental events that occur between January 1 and May 31 will generate two supplemental bills. Supplemental events that occur between June 1 and December 31 will generate one supplemental bill.

You may also receive more than one supplemental tax bill if more than one supplemental event has occurred in a fiscal year. If this occurs the bills are pro-rated between each owner for the period of time they owned the property.

The following topics, questions and answers are presented in this guide:

1. What is a supplemental tax bill?

In simple terms, a supplemental tax bill reflects any increase or decrease in property tax generated by a supplemental event, effective immediately after the event takes place.

By law, a supplemental assessment becomes effective on the first day of the month following the month in which a supplemental event takes place. So in other words, if a supplemental event occurs on September 5, any increase or decrease in taxes resulting from that event becomes effective on October 1. If it occurs on April 23, it becomes effective May 1, and so on.

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2. When will I receive my supplemental bill?

Bills are typically generated three to twelve months after the event that triggered them. There is no statutory timelines for their issuance, as there are for annual bills. The bills are issued monthly as ongoing work is completed by the Assessor’s Office.

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3. What qualifies as new construction or a change in ownership?

New construction is:

Any improvement to real property, such as adding a room, pool or garage;

Any alteration which restores a building or other improvement to the "substantial equivalent of new" (such as completely renovating a building);

An alteration that changes the way in which the property is used (e.g. a residence is converted to a retail store).

Only the portion which is newly constructed may be reassessed.

Changes in ownership are:

The sale or transfer of a property.

It should be noted that certain forms of property transfer are not subject to reassessment. Exceptions include:

• Interspousal transfers
• The addition of joint tenants
• The transfer, sale or inheritance of certain properties between parents and their children where an application for exclusion is filed with the assessor
• The transfer, sale or inheritance of certain properties from a grandparent to a grandchild where certain conditions are met and an application for exclusion is filed with the assessor. 
• Transfers between domestic partners

For further information or exclusion claim forms, please contact the Office of the Assessor at (916) 875-0750.

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4. What happens when the Assessor reassesses my property?

The Assessor determines the fair market value of that portion of the property that was newly constructed or changed ownership based on current market values. Once the new assessed value of your property has been determined, the Assessor will send you a "Notice of Supplemental Assessment" that will show the new assessed value as well as the net supplemental assessment amount and how it was calculated.

Example:

New value at date of purchase or completion of new construction: $320,000
Prior assessed value on current main tax roll: - 200,000
The Net Supplemental Assessment will be: + $120,000

If the net difference is a positive amount, a bill will be generated if the bill amount if over $20.

If the net difference is a negative amount, a refund will be generated if the amount of refund is over $20 and the annual tax bill has been paid in full.

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5. Can I file an appeal of a supplemental assessment?

Appeals of supplemental assessments must be filed with the Assessment Appeals Board (not the Assessor) within sixty (60) days of the mailing date shown on the bill or on the refund check. The Assessment Appeals Board acts under the direct authority of the Board of Supervisors and its function is to independently resolve valuation disputes between assessors and property owners.

If you feel a supplemental assessment is incorrect, we recommend that you discuss the assessment with the Assessor as soon as possible after receiving your "Notice of Supplemental Assessment" and prior to filing an appeal. It is quite possible that the assessment may be corrected without an assessment appeal hearing, if you can provide the Assessor with convincing evidence that the assessment was incorrect.

Important: If you choose to appeal your assessment, you must still pay your tax installments on any existing bills in full by the appropriate deadlines; otherwise, you will incur penalties while the case is in the appeals process. Filing an appeal does not suspend the payment of any property taxes due on the property or the assessment under appeal.

If a reduction is granted by the Appeals Board, a refund will be issued to you at some point after the decision is transmitted to the County Auditor. In any case, it is important that you understand that the filing of an appeal does not excuse the property owner from paying any taxes due.

Further information about the appeals process may be obtained by contacting the Appeals Board at (916) 874-7894.

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6. Will I still receive an annual tax bill in October?

Yes. The supplemental tax bill is sent in addition to the annual tax bill and both must be paid as specified on the bill.

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7. If I pay property taxes through an impound account (i.e., with my mortgage payment), will my lender get my supplemental tax bill?

No. Unlike the annual tax bill, mortgage servicing agencies do not receive the original or a copy of the supplemental tax bill. Instead, supplemental bills are sent directly to the property owner. Moreover, these agencies typically do not withhold funds to pay these bills.

When you receive a supplemental tax bill, we recommend that you either pay the bill or contact your lender to discuss who should pay the bill.

It is important to understand that if the supplemental tax payment is not made before the delinquency date of the bill due to a misunderstanding between yourself and your lender, the penalties cannot be excused. State law stipulates that this is not an acceptable reason for excusing penalties.

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8. What happens if I resell a property shortly after I purchase it?

If you purchase and then resell property within a short period of time and the Assessor has not already issued a supplemental assessment for the date you first acquired the property, any supplemental tax bills will be prorated between you and the new owner. In that particular case, you would eventually receive a tax bill that reflects only the actual time period which you owned the property. The new owner would receive a separate supplemental tax bill that reflects the period of ownership from the date they acquired the property until the end of the fiscal year.

If the supplemental bill for your acquisition of the property is issued before a subsequent sale of the property, the county cannot prorate the bill between you and the new owner. Any proration of the supplemental bill you do receive then becomes a private matter to be resolved between buyer and seller.

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9. How are supplemental taxes computed?

The formula for calculating a supplemental refund is shown below:

(Amount of Net Supplemental Assessment) x (Tax Rate) x (Monthly Factor)

The Amount of Net Supplemental Assessment is the new assessed value minus the prior assessed value minus any exemptions allowed.

The Tax Rate is 1% plus recapture factor for any voter-approved bonded indebtedness. Most tax rates in Sacramento County are between 1% and 1.20%.

The Monthly Factor represents the number of whole months remaining in the fiscal year after the month of the supplemental event. These factors are shown below:

Month (Factor)
January (.42)
February (.33)
March (.25)
April (.17)
May (.08)
June (1.00)
July (.92)
August (.83)
September (.75)
October (.67)
November (.58)
December (.50)

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10. Why would an owner receive more than one supplemental tax bill?

There are three reasons why an owner would receive more than one supplemental tax bill:

A. The Supplemental Event Occurred between January 1 and May 31

A supplemental assessment is always generated for the fiscal year in which the event occurred.

In addition, an event occurring between January 1 and May 31 will generate a second supplemental assessment

The second bill is generated because the annual roll, January 1 lien date assessment created for the coming fiscal year does not reflect the change in value generated by that event, but must also to be adjusted to reflect the difference as well.

B. Prior Owner Had a Supplemental Event in the Same Fiscal Year

You can also receive multiple supplemental bills in situations where a series of supplemental events take place within the same fiscal year for different owners. If the bill for the prior owner’s supplemental event is for the same fiscal year in which you took ownership, you will receive a pro-rated portion of that bill for the time period you owned it.

C. Multiple Supplemental Events Occurred While You Owned the Property

If multiple supplemental events (changes in ownership and new construction) occurred while you own the property, you will receive one or two supplemental bills for each of these events. Supplemental assessments are generated for each of these discrete activities.

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11. When must supplemental tax bills be paid?

Bill payment dates are printed on the tax bills. Penalties are incurred if payments are not made by these deadlines.

The dates on which supplemental tax bills become delinquent varies depending upon when they are mailed by the Tax Collector. As outlined below, if the bill is mailed between July 1 and October 31, the taxes become delinquent on December 10 for the first installment, and on April 10 for the second installment (the same schedule as for annual tax bill).

Bill mailed between July 1 and October 30

1st installment delinquent after: December 10

2nd installment delinquent after: April 10

If the bill is mailed between November 1 and June 30, the delinquency dates are determined as follows: The first installment is delinquent on the last day of the month following the month the bill was mailed; the second installment is delinquent on the last day of the fourth month after the first installment delinquency date.

Bill mailed between November 1 and June 30

1st installment delinquent after: Last day of the month following the month bill was mailed

2nd installment delinquent after: Last day of the 4th month after the 1st installment became delinquent

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12. If payment is late because of a misunderstanding with my lender, can the penalties be excused?

No. State law stipulates that this is not an acceptable reason for excusing penalties.

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13. Can I make a partial payment if I can’t pay in full?

No. The full amount of each installment must be paid in full. Otherwise the payment will be returned with a notice of the correct amount required to pay the full amount of the installment due. If you fail to respond in the time required after that notice, penalties and fees will be added to your tax bill.

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14. Am I entitled to a Homeowner's Exemption on my supplemental tax bill?

Yes, you may be eligible for to receive the Homeowner's Exemption of $7000 of assessed value on a supplemental tax bill if the property you acquired was not already receiving the exemption on its annual roll bill and the property you acquired will be your principal place of residence.

Homeowners’ Exemptions, however, are not granted automatically. You must submit a claim to the Assessor for the Homeowners’ Exemption no later that the 30th day following the date of notice printed on Assessor’s ‘Notice of Supplemental Assessment to receive a full exemption, or an exemption of 80% of the full amount will be granted if you file a claim by the first installment due date.

To be eligible for the exemption you must occupy the home as your principal residence within 90 days of the purchase date.

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15. Are other exemptions available that might help lower my taxes?

Yes. Supplemental taxes are eligible for the same property tax exemptions and assistance programs as are annual tax bills. In addition to the Homeowner's Exemption, you may apply to the Assessor's Office for other exemptions such as the Disabled Veterans, church, and welfare that may result in tax savings if you qualify. You must apply to the Assessor for these exemptions no later that the 30th day following the date of notice printed on the Assessor’s Notice of Supplemental Assessment. For further information, contact the Assessor's Office at (916) 875-0720.

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16. Are other forms of property tax assistance available?

Yes, the State of California administers two programs that provide either property tax assistance through rebates of taxes already paid, or by postponing property tax payment until death or future transfer of the property. Note that these programs are not administered by the county or by the Assessor. You must make application to a state agency to receive them. Those programs are:

Property Tax Reimbursement:

If you are blind, disabled, or at least 62 years old, with a limited household income, you may qualify to participate in the Homeowner Assistance program. This program provides cash reimbursement of a portion of the property taxes on your home. The filing period for this program is May 15 through August 31. Call the State of California Franchise Tax Board at 1-800-852-5711, or visit the Franchise Tax Board's Homeowners' and Renters' Property Tax Assistance Program on the Internet at: http://www.ftb.ca.gov/individuals/hra/index.shtml.

Property Tax Postponement:

If you are blind, disabled, or at least 62 years old, with a limited household income, you may qualify to participate in the Property Tax Postponement program. The postponed taxes are a lien on the home and become due (with interest) upon moving, the sale of the home, or death. The filing period for this program is May 15 through December 10. Call the State of California Controller's Office at 1-800-952-5661, or visit the State Controller's Property Tax Deferment Program on the Internet at: http://www.sco.ca.gov/ardtax_prop_tax_postponement.html.

Where can I get general property tax information or help?

For additional information about property taxes, visit the Sacramento County Assessor’s website at: www.assessor.saccounty.net, or come to our customer service counter in person at 3701 Power Inn Road, Suite 3000 Sacramento, CA 95826-4329

You can also access a great deal of property tax related information, informational pamphlets, and assessment handbooks on the State Board of Equalization’s Internet website at: www.boe.ca.gov/. 

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