California’s Property Tax Calendar: A Homeowner’s Guide to Due Dates and Deadlines
California’s property tax system can feel complex, especially for new homeowners navigating the intricacies of escrow accounts and installment deadlines. This article aims to demystify the process by outlining the key dates in California’s property tax calendar, explaining how escrow companies handle payments, and offering tips to avoid delinquency.
The Two Key Dates:
- December 10th: This is the first installment deadline for secured property taxes, with a 10% penalty added for late payments.
- April 10th: This is the second installment deadline, with another 10% penalty for tardiness.
Understanding Secured vs. Unsecured Taxes:
Secured property taxes are levied on real estate, while unsecured taxes apply to personal property like boats and trailers. The deadlines mentioned above apply only to secured taxes. Unsecured taxes have a single due date of August 31st, with a 5% penalty per month for late payments.
How Escrow Companies Handle Property Taxes:
Most homeowners in California use escrow accounts to manage their property taxes. Here’s how it typically works:
- Your mortgage lender sets up an escrow account. This account holds a portion of your monthly mortgage payment to cover taxes and insurance.
- Your tax bill arrives in October. This bill details the assessed value of your property, the tax rate, and the total amount due.
- Your escrow agent receives the bill and calculates your monthly escrow contribution. This ensures enough funds are available to pay the installments on time.
- The escrow agent pays the taxes on your behalf. They typically do this before the deadlines to avoid penalties.
- You receive an annual escrow statement. This document summarizes your escrow activity, including tax payments made on your behalf.
What if you don’t have an escrow account?
If you own your home outright or have a small mortgage balance, you’re responsible for managing your own property taxes. Be sure to mark the key deadlines on your calendar and make payments directly to the county tax collector’s office.
Delinquency and Penalties:
Missing property tax deadlines can lead to a cascade of issues, including:
- Late penalties: As mentioned above, penalties are 10% per installment for secured taxes and 5% per month for unsecured taxes.
- Lien on your property: Unpaid taxes can lead to a lien being placed on your property, hindering future sales or refinancing.
- Foreclosure: In extreme cases, chronic delinquency can result in foreclosure.
Tips to Avoid Delinquency:
- Review your escrow statements regularly. Ensure your escrow account has enough funds to cover upcoming tax payments.
- Contact your lender or escrow agent if you have questions. They can explain your specific situation and help you avoid any issues.
- Factor property taxes into your budget. Remember, they’re an annual expense, not a surprise one-time payment.
- California State Board of Equalization: https://www.boe.ca.gov/proptaxes/proptax.htm
- County Tax Collector Offices: Find your local tax collector’s contact information here: https://www.ftb.ca.gov/pay/index.html
By understanding California’s property tax calendar and how escrow companies handle payments, you can ensure timely tax payments and avoid costly penalties. Remember, knowledge is power, and proactive financial planning can save you stress and money in the long run.
Click here to download our California property tax calendar.