Top 7 PACE Program Questions Answered
Have you seen a big increase in your property tax bill? It may be due to energy efficient upgrades you’ve made to your home through the PACE (Property Assessed Clean Energy) program. Click each question below to read the answer.
What is the PACE program? :
PACE stands for Property Assessed Clean Energy. PACE is a state program that allows for the financing of energy-efficient improvements to your property through charges, called “special assessments,” on your tax bill. PACE loans are operated and administered by government-approved third parties, such as CA HERO Program, YGRENE and California First. These third party administrators are responsible for adding PACE special assessments onto your tax bill which then become a lien on your property.
On your property tax bill, the PACE special assessment will appear under Boxes 13 or 14, the "Tax Distribution" section, and it may be one of the largest charges on your bill. The contact number for your PACE program administrator is right next to the amount.
Will the PACE payment be on my tax bill every year? :
After you've signed the loan, the first charge for your PACE improvements may take one or two tax cycles to show up on your bill. If it doesn't appear this year, you'll likely see it on next year's tax bill. The charge will be there until you've paid the loan off and your administrator requests that it be removed from your property taxes.
Your administrator should give you a payment schedule with your contract documents. Contact them if you don’t have it.
How will the PACE assessment impact my impound-escrow account?:
The PACE assessment will increase the amount your lender pays for your property taxes. Your lender will in turn increase your monthly mortgage payment to cover the extra cost.
Can I pay for the PACE portion of the tax bill separately? :
No, state law requires certain information like special assessments to be included in the bill. Special assessments are collected at the same time as property taxes. Your tax bill is due in two installments, which must be paid in full. No partial payments are allowed.
If I paid off my PACE loan, can you remove the charges from my tax bill? :
Your PACE administrator must be the one to request that the County remove the assessment.
The PACE program submits correction requests one or two times a month. When your PACE line item is removed, you will receive a corrected tax bill.
But, if you don’t receive that corrected bill before your property taxes are due, you must pay the total amount shown on your bill to avoid penalties. Our office will send you a refund if your corrected bill shows you’ve overpaid.
Remember, the tax collector is not authorized to make any adjustments or changes to the amount due on your tax bill. The tax collector is required to collect the payment amounts reflected on your tax bill, and will then issue any refunds due based on subsequent corrections.
Will I get a penalty on my PACE payment if I don’t pay my property tax bill? :
You will be charged a penalty and interest if you don’t pay your bill on time, just as with other property taxes. You will be charged a 10 percent penalty on your full first installment if you don’t pay it by December 10th, and you will incur a 10 percent penalty, plus a $10 fee, on your full second installment if you don’t pay by April 10th. Bills that are not paid by June 30th will go into default, and you will be charged an extra 18 percent penalty per year.
If your property taxes, including the PACE assessment, remain unpaid for a number of years, your Pace administrator could foreclose on your house, or your property could be auctioned off at the County’s annual tax sale.
What will happen if I sell the property with a PACE assessment? :
Under California law, property taxes typically stay with a home when it’s sold, and the same is true with special assessments. If you sell or refinance your property, your PACE administrator may let the PACE assessment stay with it.
However, either your lender or the buyer’s lender may require you to pay off the rest of the assessment. You should ask your lender what they require.