Property tax in San Diego is on the mind of just about every home owner and home buyer at some point. There is good reason for that, property taxes in San Diego represent a significant expense in homeownership. Multiple due dates, delinquent dates, supplemental taxes and various exemptions also mean there is a bit more to them than simply knowing the property tax rate. Join me as we cover just about everything you have ever wanted to know about San Diego property taxes. From the rate, who you pay, where the tax money goes, common exemptions, options for tax reduction, important dates, when to expect dreaded supplemental tax bills, how those supplemental bills are calculated, tax deferral options for seniors, what impound accounts are. . . just to name a few! For now, let us start with the basics.
Before we dive into the basics and not so basics of property tax in San Diego, I need to point out I am a real estate agent and NOT an accountant, financial advisor, tax expert, or olympic pole vaulter (I just threw that last one in for good measure). The tax resources you will find here are based largely off information from our friendly San Diego County Assessor’s Office and the San Diego County Treasurer and Tax Collector. Since lowly real estate agents are not qualified to dispense tax or legal advice, please consult with a suitable professional rather than relying on any of the information I have painstakingly put together here. With that out of the way, let us get into property tax in San Diego.
The Basics of Property Tax in San Diego
Property tax in California was dramatically reshaped by decades old Prop 13. This proposition was partially a byproduct of seniors being priced out of their long-term homes due to ever increasing property taxes. As Prop 13 caps the tax rate and rate of increase, the burden of property taxes fall more heavily on recent homebuyers (and for that matter, expensive home buyers). Although many might see our property taxes in San Diego as “reasonable” relative to tax rates in other areas of the country, our very high housing costs mean San Diegans and Californians pay relatively high property taxes. It’s one of many sunshine taxes.
Property Tax Rate in San Diego
The short answer: the property tax rate in San Diego, California is about 1.2% of assessed value per year.
If you are buying a house right now, the assessed value is likely going to be what you pay for the home. To provide an example to better illustrate the rate, let’s assume you purchase a home for $1,200,000. When we multiply that by 1.2%, we get $14,400. For this example, the homeowner would be paying about $14,400 per year or $1,200 per month in property taxes.
The base rate for property taxes in California is 1% of the assessed value. Since Prop 13 allowed for increasing that tax rate to cover voter-approved indebtedness, actual property taxes in San Diego are a bit above that 1% base rate. Thus the 1.2% estimate. Prop 13 also stipulates that California’s property tax can only go up by two percent per year, or the rate of inflation, whichever is lower. With inflation on a fast track upward at the time this article was written (December, 2021), the “whichever is lower” provision is important.
Property Taxes in San Diego County
Although there is some variation throughout California, property taxes in San Diego County are pretty consistent with many of the counties in the state. Usually the rate hovers a bit above 1%. I have seen some online property tax calculators that seen to have some questionable accuracy, including several that show “effective rates” below 1%.
These property tax calculators sometimes use data on median home prices rather than a direct evaluation of the actual rate. There are also many articles that focus on what counties pay the “most” and “least” in property tax, however they are usually focused on what counties have the most expensive homes. In those articles they are not talking about the tax rate, but instead focus on what an average, typical or median homeowner pays in dollars per year. In other words, property taxes in San Diego County, or any other county in the state usually don’t deviate much from the slightly over 1% of assessed value per year estimate.
If you are looking for property tax rates in a county other than San Diego, contact your local tax assessor or collector. Most have a property tax search feature specific to individual addresses or parcel numbers. You can find the San Diego property tax search tool here.
How San Diego Compares to Property Tax Rates throughout the US
To get a sense of property tax rates in the rest of the country, it is worth looking at this data visualization from Attom Data. You will find a heat map showing approximate property tax rates for most of the United States
San Diego Property Tax Due Dates
In years past, the San Diego property tax bill could be confusing. However, they have done a nice job simplifying it. The San Diego County Assessor and the Treasurer / Tax Collector are responsible for determining and collecting property taxes here in America’s finest city. Your San Diego property tax bill should always be from the San Diego Treasurer-Tax Collector.
San Diego Property Tax Due Dates are:
First installment is due November 1 and delinquent after December 10
Second installment is due on February 1 and delinquent after April 10.
As seen above, annual property taxes in San Diego are billed in two installments. However, you can pay both installments when the first payment is due if you prefer to get the pain over with. Each installment has a due date and a date at which the payment is considered delinquent. As a result, your San Diego property tax due dates could be a little confusing and hard to remember.
Property tax dates are hard enough to remember that someone created a mnemonic to help us out: when it comes to paying your property taxes, “No Darn Fooling Around.” (N)=November (D)=December (F)=February and (A)=April. Since the mnemonic doesn’t really help you with the actual dates, remember the due dates are both on the first of the month (November 1st, February 1st) and the delinquent dates are both on the 10th (December 10th and April 10th). Or, just bookmark this article and come back every time you forget.
Important San Diego Property Tax Dates
In addition to the key dates above, the following is excerpted directly from the San Diego County Assessors Office:
Important Dates to Remember:
August 31 – Unsecured tax deadline, 10% penalty added on September 1
September – Secured property tax bills mailed late in the month
November 1 – First installment of secured property taxes due; delinquent unsecured accounts are charged additional penalties of 1.5% until paid
December 10 – First installment is delinquent after close of business; 10% penalty added to payments made after this date.*
January 1 – Unsecured bills mailed out; lien date for unsecured taxes and current secured taxes
February 1 – Second installment of secured property taxes due
April 10 – Second installment payment deadline; 10% penalty plus $10 cost added to payments made after this date.*
May – Delinquent notices for any unpaid current taxes mailed
June 30 – End of fiscal year
July 1 – Beginning of the fiscal year; delinquent secured accounts are transferred to the defaulted tax roll and additional penalties added at 1.5% per month on any unpaid tax amounts, plus a $33 redemption fee. These bills are also referred to as prior year secured taxes or defaulted taxes.
* If a delinquent date falls on a weekend or holiday, the delinquent date is the next business day.”
Property Tax Impound Accounts and Paying Your Property Tax on Time
There are two general ways to pay your property taxes:
1) Pay directly to the county treasurer / tax collector. – or –
2) Impound property tax and pay your property taxes monthly with your mortgage payment.
An impound account, sometimes called an escrow account or mortgage impound, is where your mortgage servicer creates an account that collects funds to pay your property tax and homeowner’s insurance. The account is funded monthly with money you pay over and above your normal principal and interest payments for your actual mortgage. The loan servicer maintains an accounting of funds into the impound account, payments made for taxes and insurance and sometimes adjusts your monthly mortgage payment to make sure your impound account remains adequately funded. This has to be set up ahead of time, you can’t simply pay more than your mortgage payment.
I personally have paid my San Diego property taxes both ways and I definitely favor impound property tax payments for several reasons. First, by doing a property tax impound account, you effectively spread your property tax burden evenly throughout the year vs doing one or two whopping payments. Sure, you are paying the same amount either way, but it feels less painful monthly and is more predictable. Second, since the impound account handles the property tax and insurance payments, it saves having to make those payments separately. You don’t even have to remember the “No Darn Fooling Around” mnemonic for when property taxes are due and delinquent. Third, you get a nicely itemized accounting yearly that documents your mortgage payments and payments for property taxes and insurance. Fourth, a property tax impound reduces the chances that you lose track of a bill and make a late payment. In short, I recommend considering setting up a property tax impound account when you buy a home (or, talk to your lender about setting one up after the fact if you already purchased).
Speaking of Late Payments, What if I Didn’t Get My Property Tax Bill?
Late property tax payments are definitely something you want to avoid as they can result in penalties and potentially a lien on your property. Most county assessor offices and tax collectors will go out of their way to remind you that, “UNDER CALIFORNIA LAW, IT IS THE RESPONSIBILITY OF THE TAXPAYER TO OBTAIN ALL TAX BILL(S) AND TO MAKE TIMELY PAYMENT.” This means that even if you don’t receive a San Diego property tax bill (or any California property tax bill), you are
still responsible for paying it on time. They won’t even waive penalties if they didn’t send you a bill. Remember, with property taxes, “No Darn Fooling Around!”
Where Do San Diego Property Taxes Go?
Property taxes in San Diego, California go mostly to the county rather than the state. The state prefers to get their money from income taxes, sales tax, and corporate taxes (and lottery tickets). Overall, property taxes in San Diego are largely funding schools and, to a lesser extent, libraries.
Property taxes in San Diego typically have additional items approved by voters and include direct levies. These miscellaneous items can include glamorous items such as mosquito abatement. Your San Diego property tax bill can also include dreaded Mello-Roos fees.
What About Mello-Roos Fees?
In short, Mello-Roos are fees that apply to a special tax assessment district set up to fund specific local infrastructure and services. Think fees for roads, schools, sewer system, etc. In San Diego, you tend to only see Mello-Roos fees on your property tax bill in relatively newer housing developments. While not all new construction homes have Mello Roos, they often do when those homes are being built in an undeveloped or under-developed area without much infrastructure. Homes in Carmel Valley, Scripps Ranch, etc. are more likely to have Mello-Roos than older neighborhoods like Point Loma, Mission Hills, La Jolla, etc. Mello-Roos do eventually expire, but expiration dates are often 10+ years into the future here in San Diego.
Supplemental Property Taxes
Supplemental property taxes are calculated by your home’s new assessed value minus the prior value. That difference is then then prorated for the remaining months after the sale date. That prorated amount is then multiplied by one percent to arrive at the amount of your actual supplemental tax bill. As an example, let’s say you home’s purchase price is $300,000 higher than the prior assessed value and there are six months left in the year. $300,000 x .5 (representing half the year) equals $150,000. When you multiply $150,000 by 1%, your supplemental tax bill can be expected to be $1,500. This is a one-time payment unless you make improvements to your property or you add or remove someone from title (a “qualifying event”). Supplement bills are IN ADDITION to your “normal” property taxes.
Or, per the San Diego County Tax Collector:
A supplemental or negative supplemental tax bill will arrive separately from all other property tax bills. Anytime a property is sold to a new owner or new construction is completed, state law says it must be reassessed by the County. That reassessment will most likely change the assessed value of your property. When your assessed value changes, the County must recalculate your property taxes, and when those change, we will send you a supplemental tax bill. The supplemental bill shows your home’s change in value from the day you closed escrow, or reported the new construction, through the end of the fiscal year, which is June 30th. To calculate your supplemental tax bill, subtract your home’s old value from the new market value based on the reassessment. You are taxed on that difference. Next, we prorate what you owe based on the number of months left in the fiscal year. Finally, the 1% tax rate is applied to that amount to get your supplemental tax total. Watch our supplemental tax bill video above for an example.”
Supplemental bills are separate and in addition to your annual property tax bill. Most escrow companies will warn you to expect a supplemental tax bill after closing. And, by “after closing”, it’s worth pointing out your supplemental bill can takes months or even over a year to show up. If you have a property tax impound account set up, there is a good chance the supplemental property tax bill will NOT be sent to your lender for payment. Double check with your lender to confirm. As with regular property taxes, it is considered your responsibility to pay the supplemental bill, even if you don’t receive it.
Historical Properties, The Mills Act, and Property Taxes
According to the California Office of Historic Preservation, “The Mills Act is the single most important economic incentive program in California for the restoration and preservation of qualified historic buildings by private property owners. The Mills Act Program is administered and implemented by local governments. Mills Act contracts are between the property owner and the local government granting the tax abatement. ”
Historic homes in San Diego that are part of the Mills Act can have substantially lower property taxes. A 40-60% reduction in property taxes vs non designated home is not uncommon. However, Mills act homes have to qualify for the program and go through an involved process to become officially designated. Once designated, the homes have to be maintained to certain standards and they have limitations on exterior remodeling / additions.
Prop 19 and Transferring Your Property Taxes
If you compare the San Diego property tax bill of someone that has owned their property for decades vs someone that just bought, you will quickly see why some longtime homeowners have been reluctant to list their home for sale. This very real issue surrounding mobility and inventory prompted a proposition to incentivize longterm homeowners to still consider selling and moving. That proposition was Prop 19. The hope was and is to free up more inventory in California’s tight inventory environment by making your low property taxes portable.
If you are planning on selling your home and then buying a replacement in California, please check out my more in-depth article on Prop 19. If you meet specific requirements detailed in the article, Prop 19 can provide tremendous tax benefits. Those benefits are most compelling if you have lived in your current home a long time and have very low property taxes.
Property Tax Postponement Program for Seniors, Blind, Disabled and On Limited Income
For those meeting certain criteria, there are legal options for postponement of property tax payment in San Diego and throughout California. According to the San Diego County Assessor, “A qualified homeowner can defer payment of all or part of his or her property taxes on your house, condo, or manufactured home. This deferred payment is a lien on the property and becomes due upon sale, change of residence, or death.” The program is intended for those who are blind, disabled, or 62 years of age or older and on limited income. For more details on this program, call the State Controller’s Office at 1-800 -952-5661 or at www.sco.ca.gov
Homeowners Property Tax Exemption
Last but not least in our exploration of property tax in San Diego is the homeowners property tax exemption. This falls in the category of “every little bit helps.” The Homeowners’ Property Tax Exemption stipulates that to qualify, you must occupy your home as a principal place of residence on January first, and each year thereafter. However, before you get too excited, I should warn you the benefit of this exemption for most San Diego homeowners is minimal.
The Homeowners’ Exemption delivers a whopping reduction of $7,000 off the assessed value of your home. So if you have a home with an assessed value of $1,000,000, with the homeowners’ property tax exemption, you will only be taxed on $993,000. In other words, you will save about $70 a year. For more details on this scintillating savings, check out this pdf from San Diego County.
Congratulations! You made it through the “everything you ever wanted to know about property taxes in San Diego guide.” I hope you found some very useful information and property tax resources. In case you snoozed through my disclaimer at the start of the article. . . Please remember I am not an accountant or tax advisor. Please consult with an appropriate professional to evaluate any decisions that might impact your property taxes, liability, outlook on life, etc.
Buying or Selling a Home in San Diego?
Lastly, although I am not a tax pro, I am a real estate pro with Pacific Sotheby’s International Realty. As an agent in San Diego, California, I work with buyers and sellers throughout most San Diego zip codes. If you are reading this outside of San Diego and are planning to buy or sell, I can also refer you to a world-class Sotheby’s International Realty agent in your area, no matter where you are located in the US or throughout the world. If I can assist you with your real estate needs here in San Diego, please reach out to me via text, call, chat or email. I look forward to connecting!