COVID-19: California Provides Property Tax Extension for Homeowners and Small Businesses | Practical Law

COVID-19: California Provides Property Tax Extension for Homeowners and Small Businesses | Practical Law

In response to the COVID-19 pandemic, California is extending the delinquent date for payment of property taxes by waiving penalties, costs, and interest for late payment of property taxes until May 6, 2021, for homeowners and small businesses suffering economic hardship due to COVID-19.

COVID-19: California Provides Property Tax Extension for Homeowners and Small Businesses

by Practical Law Real Estate
Published on 07 May 2020 • California
In response to the COVID-19 pandemic, California is extending the delinquent date for payment of property taxes by waiving penalties, costs, and interest for late payment of property taxes until May 6, 2021, for homeowners and small businesses suffering economic hardship due to COVID-19.
On May 6, 2020, in response to the 2019 novel coronavirus disease (COVID-19) pandemic, California Governor Gavin Newsom issued Executive Order N-61-20. Executive Order N-61-20 waives penalties, costs, and interest for late payment of property taxes until May 6, 2021, if all of the following requirements are met:
  • The property at issue is either:
    • residential real property occupied by the taxpayer; or
    • real property owned and operated by a taxpayer that qualifies as a small business under the Small Business Administration’s Regulations (13 C.F.R. § 121.201).
  • The taxes were not delinquent before March 4, 2020.
  • The taxpayer timely files a claim for relief in a form and manner prescribed by the tax collector (typically the county tax collector in the county where the property is located).
  • The taxpayer demonstrates to the tax collector's satisfaction that the taxpayer has suffered economic hardship, or was otherwise unable to pay the taxes in a timely fashion, due to the COVID-19 pandemic, or any local, state, or federal government response to COVID-19.
Homeowners whose lenders have established impound accounts to collect their property taxes on a monthly basis do not qualify for the waiver.

Practical Implications

Executive Order N-61-20 provides a temporary extension to California homeowners and small businesses that may need more time to pay their real property taxes as a result of COVID-19 hardships. However, the order does not specify what qualifies as a hardship, or what will be required to prove hardship to the tax collector's satisfaction. Taxpayers should follow up with their local taxing authority for details about the waiver application process within their jurisdiction.
For a collection of resources related to global coronavirus, COVID-19, pandemics, and business interruption content, see Real Estate Global Coronavirus Toolkit.