I often receive calls from clients confused as to the applicability of county property taxes on vessels. Confusion occurs over the tax period, due dates, differing tax rates by city and county, etc. Please allow this post to answer the most common questions I receive.
What is this Unsecured Property Tax Bill I Just Received?
Each County Assessor imposes an “unsecured” property tax of approximately 1.1%, depending on taxing jurisdiction, on all vessels in California. Vessels are valued at their fair market value each and every year as of the January 1 lien date. The tax is due for the upcoming fiscal year. Each County’s fiscal tax year begins July 1 and runs through June 30 of the following year. The owner of the vessel as of January 1 is the responsible party for the tax for the entire upcoming fiscal year.
An unsecured property tax is an ad-valorem (value based) property tax that is the liability of the person or entity assessed for the tax for the entire upcoming fiscal year. Because the tax is not secured by real property, such as land, the tax is called “unsecured.”
Only boats owned and held in inventory for sale by a licensed dealer are exempt from property taxes.
