Costs, property taxes and closing.

Under Proposition 13, property is assessed at its base year value, generally the value at purchase, and taxed at approximately one percent plus voter-approved local rates and any special assessments. While ownership is unchanged that base year value can rise by no more than two percent a year, with one exception: a property temporarily assessed below its base year value during a market decline (Proposition 8) can rise faster as the market recovers, back up to the base year figure.

A sale usually triggers reassessment to the new market value, which is why a new owner's bill often differs sharply from the prior owner's.

SourceCalifornia BOE · decline-in-value (Proposition 8) reassessment ↗ (opens in a new tab)

It is the bill covering the difference between the prior assessed value and the new assessed value for the remainder of the tax year after a purchase or new construction. It arrives separately from the regular bill, often months after closing, and it is easy to forget to budget for.

Lenders do not always include supplemental taxes in an impound account, so confirm rather than assume.

SourceSonoma County Assessor · parcel information ↗ (opens in a new tab)

It allows eligible homeowners who are 55 or older, severely disabled, or victims of a wildfire or declared disaster to transfer their property tax base year value to a replacement home, with limits on how many times. It also narrowed the parent-child and grandparent-grandchild exclusions, which now generally require the property to become the recipient's principal residence and cap the excluded amount.

The details are specific and consequential for inheritance planning. Confirm with the county assessor and a tax professional.

SourceCalifornia BOE · Proposition 19 ↗ (opens in a new tab)

It is negotiable and set by local custom that varies by county and even by transaction type. In practice the allocation appears in the purchase agreement, and either party can propose a different split.

Ask for a written estimate of closing costs from escrow early. Assumptions about who pays what are a common source of late friction.

General informationNo single public source governs this. It depends on the property and the contract, and this page is general information, not advice for your situation. Confirm specifics with the appropriate professional.

It protects against defects in the ownership record such as undisclosed liens, errors in prior conveyances, forged documents and boundary or easement problems. Lenders require a policy protecting their interest, and an owner's policy protects yours.

Read the preliminary title report during the contingency period. Exceptions listed there are the items the policy will not cover.

General informationNo single public source governs this. It depends on the property and the contract, and this page is general information, not advice for your situation. Confirm specifics with the appropriate professional.

It is a tax on the transfer of real property. Sonoma and Marin counties charge $0.55 per $500 of value, and some cities add their own: Petaluma and Santa Rosa charge a further $2 per $1,000, as does San Rafael in Marin. Whether the buyer or seller pays is set by agreement and local custom.

City rates change, so confirm the rate for the specific address with escrow rather than assuming the county rate applies everywhere.

SourceSonoma County Clerk-Recorder · documentary transfer tax ↗ (opens in a new tab)

Loan origination and lender fees, appraisal, credit report, escrow and title charges, recording fees, prepaid interest, hazard insurance premiums, property tax prorations and any impound account funding. Buyer closing costs commonly land in the low single-digit percentage of purchase price, excluding down payment.

Your lender must provide a Loan Estimate and later a Closing Disclosure. Compare them line by line.

General informationNo single public source governs this. It depends on the property and the contract, and this page is general information, not advice for your situation. Confirm specifics with the appropriate professional.

Yes. California provides an assessment appeals process with defined filing windows, and separately allows a decline-in-value review when market value falls below assessed value. Both are handled through the county.

Deadlines are strict and vary by type of appeal, so check the current filing period with the county assessor.

SourceSonoma County Assessor · parcel information ↗ (opens in a new tab)

California offers a homeowners' exemption for owner-occupied property, plus exemptions for qualifying veterans, disabled veterans and certain other categories. They must be claimed; they are not automatic.

New owners frequently miss the homeowners' exemption in the first year. Check whether it is on your bill.

SourceSonoma County Assessor · exemptions and Proposition 19 ↗ (opens in a new tab)

California property taxes are billed on a fiscal year running July through June, in two installments, with the first due in the fall and the second in the spring. Delinquency penalties apply after the respective deadlines.

At closing, taxes are prorated between buyer and seller, which is a separate calculation from the bills themselves.

SourceSonoma County Assessor · parcel information ↗ (opens in a new tab)

For property held for investment or business use, a 1031 exchange can defer capital gains tax when the sale proceeds pass through a qualified intermediary into like-kind property within strict identification and closing deadlines. It does not apply to property used solely as your personal residence; mixed-use and converted-use situations need individual tax advice.

The timelines are unforgiving and the structure has to be in place before closing. Involve a qualified intermediary and your tax advisor early.

SourceIRS Publication 544 · Sales and Other Dispositions of Assets ↗ (opens in a new tab)

California generally follows the federal treatment of gain on a principal residence, so gain excluded federally is typically excluded for state purposes as well. Gain beyond the exclusion is taxed as ordinary income at California rates, and withholding may apply at closing.

State withholding rules have exemptions that must be claimed on the correct form at the right time. Confirm with your tax professional.

SourceCalifornia Franchise Tax Board ↗ (opens in a new tab)