Real Estate Taxes

Proposition 13 was a constitutional amendment passed by California voters on June 6, 1978. The major elements of Prop 13 were:

• It set the assessed value of property at its 1978 value and limited increases in assessed value to 2% per year.
• It set the base tax rate of a parcel at 1% of the property's assessed value.
• It only permits reassessment of property under limited circumstances such as a change of ownership or completion of construction.

If you pay $360,000 for a home, you can expect to pay about $3,600 per year in real estate taxes (not including any bonds or other special assessments).

Supplemental taxes are an outgrowth of Prop 13. The assessed value of California property is set on the "lien date" — January 1 prior to the start of the tax year (which runs from July 1 to June 30, with payments due in December and April).

A Supplemental Tax bill is necessary because the increased taxes begin the day the property is transferred, but the new rate is not reflected in the first tax bills you receive. Your supplemental tax bill(s) will be based on the number of whole months during which your actual taxes exceed the amount shown on your tax statements.

You will receive two supplemental tax bills if you close escrow between January 1st and June 30th. Even if you use an impound account for taxes and insurance, there may not be enough money set aside to cover the supplemental taxes.

You can look up tax information on the Sutter County Treasurer & Tax Collector website and the Yuba County Treasurer & Tax Collector website.

Mello-Roos taxes are assessed through special tax districts for the purpose of financing public services and/or facilities — including schools, sewer and water treatment plants, streets, libraries, parks, and police and fire protection. The name comes from Senator Henry Mello and Assemblyman Mike Roos, who authored the Mello-Roos Community Facilities District Act of 1982.

Mello-Roos is commonly found on many (but not all) homes built in the greater Yuba City area after about 1990. It is commonly thought of as a school tax since Yuba City Unified School District is the only local entity that has taken advantage of this financing mechanism. It appears on Sutter County tax bills as YC Unified CFD #1.

The tax consists of a fixed portion based on the square footage of the home at the time it was built, plus an adjustable administrative fee. The tax remains in effect for thirty years from the time the home was first completed.

Improvement bonds affect a large number of newer homes and some older homes. They have been used mainly to pay for sewer, water and drainage lines and related facilities, but have also been used for street and other improvements.

An example is the Butte Vista Improvement Bond, which costs homeowners approximately $450 per year.

Street Lighting and Landscape Maintenance Districts (SL&LMD) have been used to help pay for street lighting and maintenance of the landscaping on City-owned property along major roads. This tax adds about $250 per year to the tax bill.

All of these taxes are collected with the normal real estate taxes and, if they apply to a particular property, will appear on the tax bill.

These taxes do have a real impact on a buyer's purchasing power. If a home has all three additional taxes (Mello-Roos, Improvement Bond, and SL&LMD), it can easily add $1,300 or more (depending on the size of the home) to the annual tax bill.

Last Updated February 15, 2006