San Diego Property Taxes: What Buyers & Sellers Must Know

People think the biggest surprise in a San Diego home purchase is the sales price, but the bigger shock often shows up later in the property tax bill. I’ve seen buyers build a budget based on what the previous owner paid, then feel blindsided when their new taxes came in higher. I’ve also seen sellers get caught off guard when buyers start asking detailed tax questions during escrow, because those answers can change how everyone views the deal.

The good news is that San Diego property taxes are usually predictable once you understand how the county calculates them and why they can change after a sale.

Know the basics, so you can plan better and avoid last-minute stress.

How are San Diego property taxes calculated? They start with a base rate of 1% of the home’s assessed value under California law. That’s the part most people hear about, but it’s not the full story.

On top of the 1%, there are often local voter-approved bonds and special assessments. These extra charges are why the real rate is usually higher than 1%. When you’re estimating costs, it’s smart to plan closer to 1.25% so you’re not caught short when those added items show up on the bill.

Why do taxes often go up after a sale? When a property changes ownership, the county reassesses it at the current market value. That new assessed value becomes the new starting point for property taxes going forward.

So even if the seller’s taxes look low, that doesn’t mean yours will match. If the seller bought years ago, their assessed value may be far below today’s market value, which keeps their taxes lower. Once you buy, the county can reset the value, and your taxes can jump in year one.

What does Prop 13 change after you buy? Once the county sets the new assessed value, taxes become easier to predict over time. Under Prop 13, annual increases are capped at up to 2% per year unless there’s another sale or major new construction or improvements.

This cap is why long-term homeowners often have taxes that rise slowly. It also explains why the first year matters so much, because the reassessed value from your purchase becomes the baseline that future increases build on.

The supplemental tax bill can surprise buyers. Even after you close, there can be one more tax cost to plan for. After a sale, the county may issue a supplemental tax bill to cover the difference between the old assessed value and the new assessed value for the rest of the tax year.

This bill is separate from the regular property tax bill, and it often arrives after closing. Buyers don’t always expect it because they assume taxes are already handled, but supplemental taxes are meant to true up the amount based on the new value.

What to do before you buy or sell? Before you buy, don’t rely only on what the current owner is paying. It’s better to think in terms of what the property could be assessed at after the sale, then estimate taxes from there using the base 1% plus local assessments. It also helps to plan for the possibility of a supplemental bill, especially if you’re trying to keep extra cash available after closing.

Before you sell, understand that buyers may be running these numbers too. When everyone has a shared understanding of how reassessment works, it’s easier to avoid confusion and focus on making good decisions during escrow.

Buying or selling a home shouldn’t come with property tax surprises. When you understand how reassessment works, you can build a budget that matches what you’ll actually pay.

If you’re getting ready to buy or sell and you want help estimating property taxes on a specific address, feel free to call or text me at (619) 977-8364 or email me at team@maxfolkers.com. I can help you compare the seller’s current tax bill to the county’s reassessed value.