Tahoe Real Estate – How much will my property taxes be?
Once a Tahoe buyer has found the right Tahoe lakefront property, home, cabin, or condo to buy, one of the most common questions I’m asked is “How much will my property taxes be on my Tahoe real estate?”
While I am not an accountant, or tax professional, for general planning/budgeting purposes, in the greater Tahoe City – Truckee, California areas, a buyer can generally expect their first year of property taxes to be approximately 1.25% of the purchase price. Some agents go a little higher, some a little lower, but I’ve found that for planning purposes, using 1.25% of the purchase price is a reasonable number for our area. The breakdown is as follows:
1% of the real estate purchase price (California Proposition 13)
Add an additional 0.25% for additional tax payer approved measures such as education, fire, and other local public programs, for a total of 1.25% of the purchase price.
Tahoe Real Estate Example:
Purchase price of the Tahoe cabin is $500,000
Property taxes for the first year should be about $6,250, or 1.25% of $500,000.
California Prop 13 does allow for the underlying property value to be increased by 2% each year. That means that after the first year a Tahoe property owner could see the base value of the property increase, which means the total tax bill will also increase.
Our $500,000 Tahoe property in year one could become $510,000 the next year (2% increase in the base value of $500,000). That means the property tax would be 1.25% of $510,000, or $6,375 in year two. The following years could follow a similar formula. An increase in the property tax over the first year due to the escalation property value clause is also something a California Tahoe Buyer should plan for.
If the Tahoe real estate you are buying currently has a lower tax basis than the purchase price you are paying, you’ll get a supplemental tax bill about 90 days after you have closed escrow. So be prepared for that extra bill and payment.
If you are buying a property that has a higher tax base than what you are paying, you’ll receive a tax notice that gives you have a tax credit, and they will apply that towards your next tax bill.
If a buyer needs an exact property tax amount for the Tahoe real estate they are purchasing, or if they need tax planning advice, I always recommend speaking to a tax professional.
Lake Tahoe, California Real Estate property taxes.
Need more help in trying to figure out your Truckee – North Lake Tahoe home buying options?
Do you want more information on the different neighborhoods, HOA fees, home owner amenities, locations, and which ones will best meet your individual needs? Call me at 530.414.1260 and I can help you find the right place to buy!
Overview and summary completed by:
Laura A. Allen | 530.414.1260 | Laura@TahoeLaura.com
BROKER ASSOCIATE, Tahoe Real Estate Agent
CalRE# 01473598
Coldwell Banker, Tahoe City, CA CalRE#01908304
All information is deemed reliable, but is subject to change, and/or correction without notice.
Buyers and Sellers should investigate and verify all information to their own satisfaction.
Tahoe Real Estate – How much will my property taxes be?