What is a supplemental tax bill?
When you are buying a home, your proration for property taxes in escrow will be based on the current owner’s assessed value. The supplemental tax bill that you will receive is tax on the difference between your purchase price and the owners current assessed value.
Example:
You are buying a home for $600,000 with a property tax rate of 1.25%. Your annual property tax bill is $7,500. The current owner’s assessed value is $500,000 and their annual property tax bill is $6,250. For your closing costs, they will prorate the $6,250 depending on what day and month you are closing. You will get a “supplemental tax bill” for the prorated difference of $1,250 at a later date.