HOW DOES PROPERTY TAX WORK?
Property tax is a local tax, raised and spent locally to finance local governments and public schools. This tax is of major importance as the largest single revenue source to municipal and school district services. Counties, cities, towns, school districts, and special districts use property taxes to fund schools, police and fire protection, road maintenance, and many other municipal services.
Property tax is an ad valorem tax, meaning that it is based on the value of real property. Real property (commonly known as "real estate") is land and any permanent structures on it. Property taxes must be paid annually by anyone who owns real estate and/or personal property (businesses, manufactured homes, boats and airplanes).
For the County of Santa Clara, property tax represents approximately 40% of general fund revenue. This revenue supports government activities such as public protection, public assistance, health and sanitation, general government, etc.
How property taxes are determined
Three departments comprising of the Assessor’s Office, Controller-Treasurer Department, and Department of Tax and Collections form the primary County property tax administration team. An overview of the property tax process is shown below.
How your taxes are allocated
Property taxes consist of a 1% general levy plus voter-approved debt and any applicable special assessments. Taxes and assessments are specifically identified on the property tax bill and are distributed as stated on the bill, except the 1% general levy. The general levy of 1% is distributed among many agencies in the county on a countywide basis pursuant to the Revenue and Taxation Code.
In 1979, Assembly Bill 8 (with many subsequent amendments) was adopted to provide procedures for counties to allocate property taxes. It ensures, in any fiscal year, a local government will receive property tax revenue equal to the amount which it received in the prior fiscal year plus the change that has occurred in the current year within its boundaries. The revenue allocation of the countywide 1% property tax levy is calculated pursuant to Revenue and Taxation Code section 96.5.
Department of Tax and Collections collects the taxes, then forwards them to the Controller-Treasurer Department for distribution to all eligible jurisdictions in the county.
Property Taxes in Santa Clara County
The general allocation of property taxes in Santa Clara County can be seen in the dashboard below.
1% Property Tax Distribution in Santa Clara County
Top 10 Commercial Taxpayers for Santa Clara County, Fiscal Year 2022-23
Collections from secured businesses represented 27.2% of the collections yet only represent 5.5% of the parcels being taxed. Below are visuals that illustrate the top 10 commercial taxpayers in Santa Clara County. In Fiscal Year 2022-23, the top ten taxpayers represent 4.8% of the total tax collected for the year.
Learn more about the property tax process. Visit the Tax Bill and Collections page to learn more about the major tax bills that are issued against all taxable property in the county. Visit the Where Do My Property Tax Dollars Go page to learn how these monies benefit the community.
1. County of Santa Clara Property tax webpage: https://dtac.sccgov.org/services/property-taxes
2. Property Tax Highlights Report: https://controller.sccgov.org/property-tax-highlights
3. Office of the Assessor Glossary: https://www.sccassessor.org/faq/glossary