Property Tax Info at Your (Cyber) Fingertips

While homes in Orange County are more affordable than they've been in years, there's a potentially expensive trap out there for the unsuspecting buyer.

Property Tax Basics

California's Prop 13, passed in 1978, capped property taxes at 1% of a home's value, and also limited the amount of increased assessment as a property's value rises to 2% per year. Of course, a home's value is reset each time it is sold, so no matter what the seller's property tax was, a home buyer can expect an annual property tax bill of 1% of the purchase price.

Sounds simple, but there's a catch. The "property tax" is not the only liability that shows up on your property tax bill. It may also include a wide array of "special assessments" for various voter approved bonds or other initiatives. The most notorious special assessment is the dreaded "Mello-Roos" Tax, which is typically a fixed amount rather than a percentage of the home's value. Mello-Roos taxes can range from a few hundred to thousands of dollars per year, while in some communities there are no Mello-Roos taxes at all.

What Will Your Tax Bill Be?

How can a buyer determine what the tax bill will be on a home he or she is considering buying? Obviously your Realtor should have this information at his or her fingertips, but it's at your fingertips too! Most counties make such information quickly available online, and Orange County's website is particularly easy to use.

The Orange County Treasurer/Tax Collecter Search Page allows you to search for a specific home by parcel number or address, as well as various other criteria. Once you've found the right home, you can "drill down" to see a summary of the tax assessment - but don't stop there. A the bottom of the page under the summary is a link in small text: "Click Here for Details". This is where the real meat and potatos are hidden.

A Tale of Two Cities

Let's take a look at the "details" for two home currently listed for sale - one in Misson Viejo, the other in Ladera Ranch.

28292 La Caleta in Mission Viejo is currently listed for sale for $699,990. Here are the tax details from the Tax Collector's website:



You can quickly substitue the assessed value of $447,754 with your purchase price to determine what your new tax bill will be, but what we're really interested in are the special assessments - those that are fixed amounts regardless of the value. In this case there are four special assessments totalling a whopping $33.81 per year.

30 Bedstraw Loop is a similar home located in Ladera Ranch, listed for $700,000. Tax details:


Mello-Roos rears it's ugly head - those two special assessments add over $4,500 to the annual tax bill, no matter what price you pay for the home! That effectively adds $375 to the monthly cost of owning the Ladera Ranch home.

Knowlege is Power

Obviously there may be many reasons a buyer would prefer a home in spite of a higher tax bill, but the key is to be aware of the difference in advance so that you can make a well informed decision and not face any unpleasant surprises late in the buying process.