Santa Clara County and San Mateo County Tax Guide

Tax rates and codes are constantly changing. Always consult your tax professional regarding the impact of real estate on your tax liability. You're always welcome to contact us @ (650) 331-2993 for more information.

Property Tax

Homeowners in San Mateo County and Santa Clara County pay low property taxes in relation to the assessed values of their (expensive) homes. In June of 1978, California’s voters revolted and passed Proposition 13 (a constitutional amendment) which limits the taxation of property to 1.2% of a property’s assessed value, plus special assessments and improvement bonds approved by the voters. Property tax increases are limited to a 2% increase in the assessed value of the property per year. This tax revolt was a response to property tax assessments increasing yearly at rates between 10% and 35% of a home’s value.

When a home is sold or significantly improved through renovation, a new “base year value” is established. Thereafter the increase in assessed value of a property is limited to no more than 2% per year. Since most homes in Palo Alto, Menlo Park, Los Altos, and Mountain View CA appreciate at a rate of about 8% per year (or more), within a few years this creates a huge disparity between the assessed value of a property and the its actual market value. Long term property owners have very low assessments, while new homebuyers end up paying as much as 20 times more than established residents.

Some changes in ownership are exempt from reappraisal, but a claim must be filed with the tax assessor’s office and the property must meet the qualification. For example, parents can transfer property to their children without triggering a reassessment. Seniors over 55 can transfer their low tax base one time, for their principal residence only, within or between some California Counties.

City and County Transfer Taxes on Home Sales

When a property is sold, certain cites in San Mateo County and Santa Clara County, levy a city transfer tax of a few dollars per $1000.00 of a home’s sale price. In addition, both Santa Clara County and San Mateo County also have a transfer tax of $1.10 per $1000.00 of home sale price. Transfer taxes are allocated between buyer and seller on the basis of tradition, but are subject to negotiation. Transfer taxes are subject to change so always consult your tax Professional.

Santa Clara County City Transfer taxes:

• Palo Alto City Transfer Tax: $3.30 per $1000.of sale value or $3300.00 on a one million dollar home
  
• Mountain View CA City Transfer Tax: $3.30 per $1000. of assessed value or $3300.00 on a 1M dollar home
  
• San Jose CA City Transfer Tax: $3.30 per $1000. of assessed value or $3300 on a one million dollar home
  
• Santa Clara County Transfer Taxes: $1.10 per $1000.00 of home sale value or $1100.00 on a 1M dollar home
  

San Mateo County City Transfer Taxes:

• San Mateo City Transfer Tax: $5.00 per $1000.00 of home sale price or $5,000. on a one million dollar home
• Hillsborough City Transfer Tax: $.30 per $1000.00 of home sale price or $300. on a one million dollar home
  
• San Mateo County Transfer Tax: $1.10 per $1000.00 of assessed value or $1100. on a one million dollar home

Supplemental Property Tax Bills

When a property is sold, the new assessed value is usually significantly higher than the previous assessed value. The assessor’s office issues a Supplemental Tax Bill to cover the increase in tax rate adjusted for the number of months left in the fiscal year. The supplemental bill must be paid in addition to the property tax bill. Some new homeowners will get as many as 4 tax bills their first year of home ownership: two regular tax bills and two supplemental tax bills. Supplemental tax bills are generally not covered by impound accounts, and must be paid by the new home buyer on time or late fees will be charged.

California Sales Tax and Use Tax

The California sales tax is imposed on all California retailers. Santa Clara County sales tax is 8.25%, and San Mateo County sales tax is 8.25%. It applies to all retail sales of tangible personal property in the state. Retailers making sales in the State of California are required to pay their taxes to the State of California Board of Equalization. Retailers are required to pay and report sales taxes to the Board of Equalization and they have the option of collecting sales tax reimbursement from their customers. Almost all retailers utilize this option. Whether or not a retailer collects the sales tax, the retailer is liable to remit the tax due.

The California use tax is imposed on consumers of tangible personal property that is used, consumed, or stored in this state. Use tax applies to purchases from out-of-state vendors that are not required to collect tax on their sales. Use tax also applies to most leases of tangible personal property.

The state sales tax and use tax are "mutually exclusive," which means either sales tax or use tax applies to a single transaction, but not both.

Santa Clara County and San Mateo County Closing Costs, County transfer tax & City Transfer Tax Guidelines

Closing Costs are allocated between buyer and seller on the basis of tradition, but are subject to negotiation in the sale of Real Property. Transfer taxes are subject to change. Always consult your Tax Professional.

San Mateo Tax Assessor & Santa Clara County Tax Assessor

Santa Clara County Tax Assessor

San Mateo County Tax Assessor

San Mateo Tax Collector / Santa Clara County Tax Collector

Santa Clara County Tax Collector

San Mateo County Tax Collector

Sales and Use Tax Rates

California City Sales and Use Tax Rates

California County Sales and Use Tax Rates

Need Assistance?

The Arjani Group is here to answer your questions regarding local and state taxes, or if you want to view any home found on our website. Please call us at (650) 331-2993. We thank you for stopping by and look forward to speaking with you!