Let's talk about something that doesn't get nearly enough attention during the home buying process.
Everyone gets focused on the purchase price, the mortgage rate, the down payment. Totally understandable. But property taxes? They tend to get a quick glance and then get pushed to the back burner. And then a few months after closing, a bill shows up that feels like it came out of nowhere.
We don't want that to happen to you.
Whether you're buying in Alamo, Danville, or anywhere else in Contra Costa County, getting a clear picture of how property taxes work here will help you budget more confidently and walk into closing without any surprises waiting on the other side.
What You'll Actually Pay Each Year
Good news first: California's Proposition 13 keeps property taxes grounded. The base rate is set at 1% of your home's assessed value, and that applies to everyone in the state.
Now, Contra Costa County does add a bit on top of that. The county layers in voter approved bond measures and special assessments, things like school bonds, BART, community college levies, and East Bay Regional Park assessments. When you add it all up, the effective property tax rate for the 2025 to 2026 assessment year falls between 1.2% and 1.5% of assessed value, depending on where your home is located and which measures apply to your specific parcel.
Your exact rate is tied to what's called a Tax Rate Area, which is determined by your property's address. Two homes just a few streets apart can actually carry slightly different rates because they sit in different districts. It's one of those quirks that's worth knowing about.
To put it in real numbers: on a $2M purchase in Alamo or Danville, you're likely looking at somewhere between $24,000 and $30,000 in annual property taxes. That's roughly $2,000 to $2,500 a month. Knowing that number before you're already in contract makes your budgeting a whole lot cleaner.
Your Purchase Price Becomes Your New Assessed Value
This one is really important, so bear with us for a moment.
Under Proposition 13, your home's assessed value is set at the market value on the date you purchase it. That purchase price becomes the foundation for every future tax calculation as long as you own the home. After the first year, the assessed value can go up by no more than 2% annually, which makes things nice and predictable going forward.
What that means in practice: the seller you're buying from might have owned their home for 15 or 20 years, paying taxes on an assessed value that's a fraction of today's price. The moment you close escrow, the property gets reassessed at your purchase price and your tax bill resets completely. It will look very different from what the previous owner was paying.
That's not a mistake or a penalty. It's just how the system works, and knowing it ahead of time makes a big difference.
The Supplemental Tax Bill (The One People Don't See Coming)
Okay, this is the big one. And we want to make sure you're ready for it.
After you close on a home, the county will send you a supplemental tax bill. It's completely separate from your regular annual property tax bill, and it's the thing that catches most buyers off guard, especially if you're purchasing in California for the first time or haven't bought here in a while.
The supplemental bill covers the difference between your new assessed value (your purchase price) and the prior assessed value the previous owner was paying taxes on. The county calculates that difference, applies the tax rate, and prorates it based on how many months are left in the fiscal year, which runs from July 1 through June 30.
Depending on when you close, you'll receive either one bill or two. Closings between June 1 and December 31 result in one supplemental bill. Closings between January 1 and May 31 result in two.
The really important part: this bill goes directly to you, not to your mortgage lender. Even if you pay your property taxes through an impound account, that account will not cover the supplemental bill. It's your responsibility to pay it, and the bill can show up anywhere from a few weeks to several months after closing. So keep a close eye on your mail during that first year of ownership.
The Homeowner's Exemption (A Small but Easy Win)
California offers a $7,000 reduction in assessed value for owner occupied primary residences. To get it, you file form BOE 266 with the Assessor's office. At a 1.2% effective rate, that saves you around $84 a year. Not life changing, but it takes about five minutes to file and there's really no reason to skip it.
A Few Things Worth Doing Before You Close
Ask your agent what the current assessed value of the property is and how long the seller has owned it. The bigger the gap between the prior assessed value and your purchase price, the larger your supplemental bill is going to be. On a home that's been held for many years in a market like this, that gap can be quite significant.
Set aside a separate reserve for the supplemental bill, on top of your down payment and closing costs. It's a one time charge, but at higher price points it can be a notable one.
And if you want to know your exact effective rate before you make an offer, you can look up the property's Tax Rate Area through the Contra Costa County Assessor's online portal. The county average is a good starting point, but your specific address gives you the real picture.
We're always happy to walk through what property taxes would look like on a specific home before you make any decisions. Browse current listings in Alamo and Danville to get a feel for what's available, and reach out anytime if you'd like to talk through the numbers together.
