Unsegregated Property Taxes

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l8kerboi23_IHB

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Hello. I am in the final stages of my Camden house purchase. During the mortgage rate lock in period, my loan officer says that I have to pay unsegregated property taxes at closing, but none of my original documents has this tax listed anywhere. Does anybody know what this tax is for and why new home buyers have to pay it?



Thanks!
 
[quote author="l8kerboi23" date=1249428860]Hello. I am in the final stages of my Camden house purchase. During the mortgage rate lock in period, my loan officer says that I have to pay unsegregated property taxes at closing, but none of my original documents has this tax listed anywhere. Does anybody know what this tax is for and why new home buyers have to pay it?



Thanks!</blockquote>


I would need more detail to be sure what "unsegregated" means to your loan officer, but I will assume what I think it is that he means.



IIRC, Camden is an attached product, and even for detached products the builder buys a lot with one APN (assessors parcel number) and once all the homes are sold on the lot a separate and new APN will be assigned to each unit/new lots. So you will pay for a portion of the unsegregated current property tax. Once you get your own separate and new APN, the assessor will send you a supplemental tax bill for the portion of taxes at your new rate from the time you took possession of the unit. Basically you have to prepay the taxes, and the builder should have bought the land for cheaper than what it is worth, and your taxes should be higher. In other words, be prepared to get a supplemental tax bill once the assessor has the new APN. If the LO is a smart one, then he/she should be able to give you a rough estimate of what your supplemental bill would be.



I could be wrong, because I have never heard of it being called "unsegregated" before, but by definition it pretty much describes the above scenario.
 
The builder has paid the property taxes for the year. Since you will be taking over possession from the builder, they want you to pay for your pro-rated share.
 
I have never heard of "unsegregated" either, I'd be careful to get a clear understanding of the meaning from your loan officer, but I think Graph and AI have it right (never thought I'd say that in one sentence). Also make sure that if you choose or must get an impound account, that the lender pays supplemental taxes. I chose to have an impound account due to a very large property tax bill only to find out that my lender wouldn't pay the supplemental bill even though the money in the account was by far sufficient to cover it. I ended up canceling my impound account because I had to pay a 7K supplemental bill while the lender was holding the funds and wanted me to wait a year for a reimbursement. If your funds are tight, supplemental bills can be an unexpected pain in the a**, so take Graph's advice and make sure you know what to expect.
 
[quote author="l8kerboi23" date=1249428860]Hello. I am in the final stages of my Camden house purchase. During the mortgage rate lock in period, my loan officer says that I have to pay unsegregated property taxes at closing, but none of my original documents has this tax listed anywhere. Does anybody know what this tax is for and why new home buyers have to pay it?



Thanks!</blockquote>


Please don't take this the wrong way, but is there a reason you asked here instead of asking your loan officer? In your shoes, I would be questioning everything just to make sure they don't slip in any "extra" charges and to let folks know that you are keeping tabs on the details of the transaction. Also, the LO is getting paid one way or another and he / she should earn that money. This is a good time to be assertive (not a jerk, but assertive).
 
[quote author="asianinvasian" date=1249464733]The builder has paid the property taxes for the year. Since you will be taking over possession from the builder, they want you to pay for your pro-rated share.</blockquote>
They only pay property taxes for the land. You pay the supplemental bill for the building structure after the purchase.
 
[quote author="graphrix" date=1249447440][quote author="l8kerboi23" date=1249428860]Hello. I am in the final stages of my Camden house purchase. During the mortgage rate lock in period, my loan officer says that I have to pay unsegregated property taxes at closing, but none of my original documents has this tax listed anywhere. Does anybody know what this tax is for and why new home buyers have to pay it?



Thanks!</blockquote>


I would need more detail to be sure what "unsegregated" means to your loan officer, but I will assume what I think it is that he means.



IIRC, Camden is an attached product, and even for detached products the builder buys a lot with one APN (assessors parcel number) and once all the homes are sold on the lot a separate and new APN will be assigned to each unit/new lots. So you will pay for a portion of the unsegregated current property tax. Once you get your own separate and new APN, the assessor will send you a supplemental tax bill for the portion of taxes at your new rate from the time you took possession of the unit. Basically you have to prepay the taxes, and the builder should have bought the land for cheaper than what it is worth, and your taxes should be higher. In other words, be prepared to get a supplemental tax bill once the assessor has the new APN. If the LO is a smart one, then he/she should be able to give you a rough estimate of what your supplemental bill would be.



I could be wrong, because I have never heard of it being called "unsegregated" before, but by definition it pretty much describes the above scenario.</blockquote>


Builders pay taxes on the land value only annually from July 1st through June 30th and all new homes detached or attached. When you close escrow you will pay back the builder what ever months are left on the unimproved land tax value the builder paid for the year the day you close escrow so if you close January 30th you would pay back the builder 5 months of unimproved land tax at the close of escrow which is the unsegregated tax bill at close of escrow you are talking about in this thread. Once the first home closes in a phase it starts the ball rolling at the county assessors to now go from unsegregated taxing meaning a phase with no improvements and no specific addresses to the county to start issuing individual APN numbers to all the improved properties in the phase. In the old days it could take 6 to 12 months before they do this. Now days the counties are hurting so it happens real quick. Say you close escrow in Jan 30th and it takes 2 months for an APN to be issued. You supplemental bill will be the difference between raw land value and the improved value for those 2 months catching you up. If you are impounding your taxes their will be an overage in your account and you can forward that supplemental bill to whoever is servicing your escrow account. If you do not have an impound account just make sure you save every month what the lender says would be the full tax bill every month in the bank and you should have an overage in you account when the supplemental tax bill comes due. This is not an extra tax it is just getting you right with the assessors office with a new home getting an a new APN. What i always tell my customers is if you get any checks in the mail from your servicer do not cash them-There is no free money as there is one time supplemental tax bill coming.
 
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