Just after a brief explaination on property tax, I'm from Australia and looking to make a purchase and move to CA. I am getting quoted monthly installment for the mortgage and then a figure for property tax. We don't have that here...
Can this be reduced to deducted annually from income tax ? Just wanting to find out what it's all about.
You guys are awesome thank you
Talk soon :)
Many lenders like to escrow funds every month for property tax and insurance. For the borrower, this is an additional amount that is paid to the lender monthly along with the regular mortgage payment. The lender holds these funds in an escrow account and handles payment of annual property taxes to the county when they come due. This helps them ensure these items are paid.
Boyd, property tax and income tax are totally separate.
Property tax is paid to the county were the property is located based on the assessed value of the property. Income tax is paid to the state (California) and federal government (IRS).
The statewide base property tax rate is 1%, but in actuality you may have to pay a little more because of different local bonds, assessments, etc that can be added on. For that same reason, property taxes can vary slightly from county to county, and even from neighborhood to neighborhood within the same county.
If you want to find out the exact rate for the location where the property is located, you'd need to contact the assessor's office in that county. Or you can go to a site like this for the ranges of rates charged by each county to get an estimate: California Property Tax: Complete List by County 2014-2015. (Personally, for quick math, I just estimate the rate at 1.25% because that's about the highest rate charged in my area.)
That should give you a pretty good idea. However, if you really want some more stimulating reading on the topic, you can go here: Understanding California
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