Question

In Los Angeles County, property taxes are typically due twice a year. They are due in November 1st, delinquent in December 10th and then due again February 1st, delinquent on April 10th.
Parcel 1 has a land assessment of $75,000 and improvement assessment of $125,000. Annual special assessments are $1,275.00, and bi-annual taxes due (inclusive of special assessments) are $1.937.50; however, annual penalties are $442.50.
Parcel 2 has a land assessment of $187,500 and improvement assessment of $312,500. Annual special assessments are $3,187.50 and bi-annual taxes due (inclusive of special assessments) are $4,843.74; however, annual penalties are $1,106.25.
What is the effective tax rate of the entire property, assuming both parcels are sold together?

Answer 1

Answer:

  19.25224 mils

Step-by-step explanation:

Property 1 has a total assessed value of ...

  $75,000 +125,000 +1,275 = $201,275

and a total tax of

  2×$1,937.50 = $3,875

__

Property 2 has a total assessed value of ...

  $187,500 +312,500 +3,187.50 = $503,187.50

and a total tax of

  2×$4,843.74 = $9,687.48

__

The total assessed value of the two properties is ...

  $201,275 +503,187.50 = $704,462.50

The total tax on the two properties is ...

  $3,875.00 +9,687.48 = $13,562.48

So, the effective tax rate is ...

  $13,562.48/$704,462.50 ≈ 0.01925224 = 19.25224 mils

_____

Additional comments

We have not included penalties in our computation of the effective tax rate, because those can be avoided by timely payment. They are not assessed based on property value, but are based on the time between tax being due and tax being paid. YMMV

We expect the same rate to apply to both parcels. Using this rate for the separate parcels gives values that may be off by a penny. We chose to present the tax rate value to 7 significant figures, because the amount of total tax has 7 significant figures.