The Supplemental Property Tax Bill: What You’ll Owe After You Buy

A few months after you close on a home in California, a property tax bill you may not expect shows up: the supplemental bill. It catches the county’s tax up from the seller’s old assessed value to your purchase price, and in Silicon Valley, where many homes sell to their first new owner in decades, the gap can be large. Here’s how it’s figured, when it arrives and how to plan for it.

Why there’s a second bill

Under Proposition 13, a home is taxed at 1% of its assessed value plus voter-approved bonds and charges, and the assessed value can rise no more than 2% a year while the owner keeps it. When the home sells, the assessor resets the value to the market value on the date ownership changes. The regular annual bill was already set using the old value, so the county sends a supplemental bill for the difference.

How it’s figured

Supplemental tax = (new value − prior assessed value) × tax rate × the share of the July-to-June fiscal year that’s left. The change counts from the first day of the month after you close. The share runs from 1.00 for a July 1 start down to 0.08 for June 1; a January 1 start uses 0.50.

The tax rate is 1% plus local bonds and charges, and it varies by neighborhood. Every Santa Clara County area pays at least about 1.0388%. San Francisco’s 2025–26 rate is 1.18268325%. For examples, we’ll use 1.2%.

One bill or two

• Close between June 1 and December 31: one supplemental bill, for the rest of that fiscal year.
• Close between January 1 and May 31: two bills, one for the rest of the current fiscal year and one for the whole next fiscal year.

An example

Say you buy a home for $2,500,000 whose assessed value was $600,000, at a 1.2% rate. The difference in annual tax is $1,900,000 × 1.2% = $22,800.

• Close in October: the change counts from November 1, eight months of the fiscal year are left, and the supplemental bill is about $15,200.
• Close in February: the change counts from March 1, so the first bill covers four months, about $7,600, and a second bill covers the whole next year, about $22,800.

After that, the regular annual bill reflects the new value. Actual bills depend on the assessor’s value and your area’s rate.

When it arrives, and who pays

• Months later. The Santa Clara County Assessor says most supplemental bills are mailed within about nine months of the purchase.
• It comes to you. Most lenders don’t pay supplemental bills from an impound account, so the county mails them to the owner. Set the money aside at closing.
• It can be a refund. If the new value is below the old assessed value, the supplemental assessment is negative and you get money back.

Don’t miss these

• Homeowners’ exemption. If it’s your main home, the exemption takes $7,000 off the assessed value, about $70 a year at 1%. File by February 15 for the full exemption, and claim it within 30 days of the supplemental notice to have it apply to that bill.
• Appeals. To challenge a supplemental assessment, file within 60 days of the notice.
• Two installments. Regular secured property tax is due in two installments, delinquent after December 10 and April 10.

Estimate yours

Our real estate calculators include a Prop 13 and supplemental tax estimate, and the Santa Clara County Assessor has its own estimator. Moving here? The Relocation Lab puts the supplemental bill, the exemption deadline and your other first-year dates on one calendar.

Planning a purchase? Call the Boyenga Team at (408) 373-1660 or (650) 383-8606. Commissions are negotiable, and we offer bundled services, so ask us what’s included.