Current homeowners know it by heart – property taxes are due twice a year, and there are important deadlines set in California for paying the two installments:

• April 10 – last day to pay the 2nd installment
• December 10 – last day to pay the 1st installment

Property taxes are based on a percentage of the assessed value of the property. When you buy real property in California, a reassessment of the property value is initiated, and this becomes the basis of your property tax.

The amount of tax is 1% of the assessed value, PLUS any additional assessments imposed by the city or the local community where the property is located. Mello Roos and sewer service charges are examples of special assessments.

Under California’s Proposition 13 passed in 1978, real property cannot be reappraised unless there is a change of ownership or new construction. You may, however, still notice your annual tax bill increasing. That’s because the assessed value may increase due to inflationary factors up to a maximum of 2% annually.

For those who have just purchased your home, it is likely that you will be receiving a Supplemental Tax Bill in the mail. These are tax adjustments made from the date of purchase, based on the new assessed value. Remember that when you first bought your home, no reassessment has yet been initiated, and so tax calculations were based on the prior assessed value.

Do you want to be worry-free when property taxes are due? Choose to open an impound account with your lender. Your monthly payment will increase, but part of it is being set aside by your bank to pay for your taxes. There is nothing more stressful than scrounging for the lump sum money to meet your tax obligation. An impound account will make sure this does not happen to you.