A California buyer purchases a home on October 1 for $900,000. The seller's Proposition 13 assessed value was $400,000. Using the standard 1% base tax rate applicable to supplemental assessments under Revenue and Taxation Code §75, what is the approximate supplemental property tax bill for the remainder of the current fiscal year (October 1 through June 30)?
Correct Answer
B) The supplemental tax is $3,750
Under Revenue and Taxation Code §75 et seq., supplemental assessments are calculated using the 1% Proposition 13 base rate only — local voter-approved override rates and special assessments are not applied to supplemental bills. Step 1: Determine the change in assessed value: $900,000 − $400,000 = $500,000. Step 2: Calculate the annual supplemental tax at 1%: $500,000 × 1% = $5,000. Step 3: Prorate for the remaining fiscal year. California's property tax fiscal year runs July 1 through June 30. From October 1 through June 30 is 9 months, or 9/12 of the year. Step 4: $5,000 × (9/12) = $5,000 × 0.75 = $3,750. Wait — that yields $3,750, which is option B. Let's verify: $500,000 × 0.01 = $5,000 annual; $5,000 × 0.75 = $3,750. The correct answer is $3,750.
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Related Topics & Key Terms
Key Terms:
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