Property Tax vs. Supplemental Tax - What's the Difference?

TAYLOR LAMBERT June 13, 2024

What's the difference between property tax and supplemental tax bill?

I get this question all the time! You'll have to pay Property Tax forever, while Supplemental Tax only happens when a property changes ownership or new construction. They are both related to the ownership of real estate but serve different purposes and are assessed at different times. Here's what you need to know about them individually in order to differentiate:

Property Tax

It is a recurring tax imposed by local governments on homeowners based on the value of their property. In Santa Clara County the property tax rate is about 1.26% of the assessed value of the property. You can pay it once a year, twice a year or get an impound account to pay it monthly.
Property tax rates and assessments vary depending on the location and the value of the property.

Supplemental Tax

Supplemental only happens when a property changes owners. It accounts for the difference between the property's previous assessed value and its new assessed value based on the recent sale price.
When a property is sold or improvements are made, the county assessor reassesses the property's value. If the new assessed value is higher than the previous one, a supplemental tax bill is issued to the new owner to cover the increase in property taxes for the remainder of the fiscal year.
The supplemental tax is a one-time payment and is separate from the regular property tax bill.

In essence, property tax is the ongoing tax paid annually based on the assessed value of the property - while supplemental tax is a one-time tax based on the difference between the old assessed value and the new assessed value, which arises due to a change in ownership or property improvements.