Property Taxes in LA County: How They're Calculated and What to Expect

Buying a home in Los Angeles is a massive financial milestone. But once the escrow closes and the keys are in your hand, the next big financial reality sets in: Property Taxes.

If you are a new homeowner in LA County, looking at your tax bill can be confusing. Why is the amount different from what the previous owner paid? What is a Mello-Roos? And why did you just get two bills?

Here is a breakdown of how property taxes work in Los Angeles County, specifically focusing on Proposition 13 and Mello-Roos, so you can budget with confidence.

The Foundation: Proposition 13

To understand your tax bill, you have to understand California’s Proposition 13. Passed in 1978, this law is the bedrock of property taxation in the state. It provides two main rules that dictate what you pay:

1. The 1% General Levy

Under Prop 13, the maximum general property tax rate is capped at 1% of the property's assessed value.

• For New Homeowners: Your "assessed value" is generally the purchase price of the home. If you bought a house for $1,000,000, your base tax is $10,000.
• The Reset: This is why your taxes are higher than the previous owner's. If the seller bought the home in 1990 for $200,000, they were paying taxes based on that lower value. When you buy it, the tax basis "resets" to the current market value.

2. The 2% Cap on Increases

This is the good news. Once your base value is set at your purchase price, the county can only increase that assessed value by a maximum of 2% per year (or the rate of inflation, whichever is lower).

• This means even if your home’s value doubles in five years, your property taxes will not. They will stay relatively stable, growing slowly over time.

The "Extras": Direct Assessments and Bonds

If you look at your tax bill, you will notice the rate is rarely exactly 1.0%. It is usually closer to 1.25%. Why?

Voters in LA County frequently approve local bonds and measures to fund schools, community colleges, water districts, and libraries. These are added on top of the 1% base rate. These are "Ad Valorem" taxes, meaning they are calculated based on the value of your home.

The Rule of Thumb: When budgeting for a standard home in an established LA neighborhood, assume a tax rate of 1.25% of the purchase price to be safe.

The Wildcard: Mello-Roos (Community Facilities Districts)

If you are buying a home in a newer development (built in the last 20–30 years) or a master-planned community (like parts of Santa Clarita, Stevenson Ranch, or newer developments in the San Fernando Valley), you need to check for Mello-Roos.

What is Mello-Roos?

Proposition 13 limited how much local governments could tax property owners, which made it hard to build new infrastructure (roads, schools, parks, sewers) for new housing developments. The Mello-Roos Community Facilities Act allowed developers to pass those infrastructure costs on to the homeowners.

How is it Calculated?

Unlike standard property taxes, Mello-Roos is NOT based on the value of your home.

• It is usually a fixed amount based on the size of the property (square footage) or the lot size.
• It appears as a line item on your property tax bill under "Direct Assessments."
• It can range from a few hundred dollars to several thousand dollars per year.

Does it expire?

Yes. Mello-Roos bonds are typically paid off over a set period, usually 20 to 40 years. Once the bond is paid, that line item disappears from your tax bill.

The "Gotcha": The Supplemental Tax Bill

This is the number one surprise for new LA homeowners.

Because property taxes are often paid in two installments (due in November and February), the previous owner may have already paid the taxes for the year—but they paid them based on their old, lower assessed value.

The County Assessor takes a few months to process your deed and update the value of the home to your new purchase price. Once they catch up, they will send you a Supplemental Tax Bill.

• What it is: A bill for the difference between the old tax rate (what the seller paid) and the new tax rate (what you owe) for the months you have owned the home.
• Warning: If you have an impound/escrow account with your mortgage lender, they usually do not pay this bill. They pay the annual bill. The Supplemental Bill is often sent directly to you, and you must pay it out of pocket.

Summary: How to Calculate Your Estimated Bill

If you are looking at a home in Los Angeles County, here is the formula to estimate your annual liability:

1. Base Tax: Purchase Price × 1.0%
2. Local Bonds: Purchase Price × ~0.25% (varies by city)
3. Direct Assessments: Add flat fees for mosquito abatement, parks, etc. (usually small).
4. Mello-Roos: Add the fixed Mello-Roos fee (if applicable).

Example Calculation:

• Home Price: $900,000
• Location: A newer community with Mello-Roos.
• Base Tax (1%): $9,000
• Local Bonds (~0.25%): $2,250
• Mello-Roos (Fixed): $2,500
• Total Annual Tax: $13,750 (Effective rate: ~1.52%)

The Bottom Line

In Los Angeles, the price tag of the house is only part of the story. Always ask your real estate agent to pull the tax records to see if Mello-Roos applies, and remember to set aside cash for that inevitable Supplemental Tax Bill during your first year of ownership.